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Insurance Article

Understanding Reset Benefit in Health Insurance

September 03 2016
Reset Benefit in Health Insurance

Know how reset benefit can help

Mr. Ahuja had a health insurance cover with sum assured of ₹ 10 lakhs. He suffered a heart attack, which resulted in hospitalisation expenses of ₹ 7 lakhs. The insurance company bore all the expenses. After a few months, he met with an accident which led to medical expenses of ₹ 6 lakhs. As the insurance company had already paid ₹ 7 lakhs out of the sum assured, he could only claim ₹ 3 lakhs and had to pay the rest out of his pocket.

Mr. Parrikar had a similar insurance policy with the same sum assured, but his policy included the reset benefit option. After making a claim of ₹ 8 lakhs due to an accident, he made a second claim of ₹ 6 lakhs for knee surgery in the same year. The insurance company paid both his claim amounts in full.

How can a single clause make such a huge difference? It may sound too good to be true, but this is how the reset benefit works.

Health insurance policyholders are often plagued by this constant worry that their sum assured may not be enough to cover their medical expenses. This worry is more prevalent if a claim has already been made early in the policy year, with a good part of the policy period remaining.

Reset benefit is a feature in top-up plans that combat this worry.

What is Reset Benefit?

Top-up plans that offer reset benefit allows for 100% reset of the sum insured once in a policy year.

This option automatically comes into operation when the sum insured (including the accrued additional sum insured, if any) is insufficient because of previous, unrelated claims in the same policy year.

Features of Reset Benefit

  • The entire sum assured has to be exhausted for its restoration
  • The restored amount can only be used for future claims that happen to fall within the same policy year
  • The new claim should not be related to any illness/disease/injury for which a claim has already been made in that policy year
  • The reset benefit will never trigger for the first claim

To understand this feature better, let us consider an example.

Mr. Kumar has a health insurance plan of ₹ 5 lakhs with reset benefit and he makes a claim of ₹ 7 lakhs. According to him, his full claim amount should be paid owing to the reset benefit option. However, in reality, this is not possible, since the reset benefit triggers only for a second claim. Therefore, he will have to pay the remaining amount out of his own pocket.

  • The sum insured of individual health insurance and floater health insurance policies will be available as per their respective policy terms.
  • Unutilised reset sum insured will not be accumulated and carried forward in the next policy year.

Availing a health insurance policy with reset benefit is a great way to ensure that your sum assured does not fall short in case of multiple claims. This is especially true in case of family floater plans, where a single policy is responsible for the health of many.

What’s more is that under this benefit, the entire amount is restored automatically, without any additional paperwork and cost for that year.

Visit ICICI Lombard Complete Health Insurance and ICICI Lombard Health Booster – A Super Top-up Health Insurance Cover to learn more about reset benefit.

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