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'Restoration' benefit in health insurance...

Monday, May 15, 2017
By Rajiv Kumar

Rajiv Kumar is MD and CEO, Universal Sompo General Insurance Co. Ltd.

If my vehicle is hypothecated with a bank and in case there is a total loss, will the insurance claim be paid to the bank or to me?
    — Jay Mishra, Parel

Bank or Lender retains the ownership of the assets, hence in case of a Total Loss of hypothecated vehicles, insurance claim is paid to the bank. If the car is damaged,  the first right will be on lien holder and after clearing the outstanding amount the payment is made to the car owner. In case if payment is to be obtained by insured then, a no objection certificate is to be obtained from the financer .
Do life insurance companies also provide health cover?
    — Ashok Kunte, Thane

Yes, life insurance companies provide health cover in form of riders as contigent additional benefits over a primary policy, which come into play in case of a specific eventuality. The basic difference between health covers of General and Life insurance companies is that, health insurers provide indemnity plans that reimburse hospitalisation costs while, life insurance companies mostly offer benefit health plans that pay a fixed amount on diagnosis of a particular disease, financial cover over and above basic sum assured. Life insurance companies cannot offer pure indemnity based health insurance policies.
What is restoration benefit in health insurance?
    — Dhiraj Bhole, Bandra

Restoration benefit in health insurance is reinstatement of the Sum Insured. If the claim is payable in the policy, then the insurance company agrees to automatically make the reinstatement of the sum insured with certain conditions, for that policy year only. Under health insurance plans with restore benefit, if Insured’s Sum Insured  gets exhausted towards treatment of an illness, the insurance company restores Insured’s 100% Sum Insured. Restoration benefit triggers only when the entire sum insured plus cummulative bonus gets completely exhausted. If the Restored Sum Insured is not utilized in a Policy Year, it shall not be carried forward to any subsequent Policy Year.
I own a luxury car. In case some miscreants steal the emblem of my car, will the insurance company pass my claim for replacing the stolen emblem with an original emblem from the showroom?
    — Punit Sahana, Kurla

Premium luxury car logos or emblems, do have a high aspiration value as they speak a lot about reputation of the car. These logos are generally made up of metals or high quality plastic. They are hugely expensive and could cost Rs 20000 to Rs 1 lakh for the luxury cars depending upon the make of car. The logos are insured under the comprehensive motor insurance plan as a part of the vehicle, therefore the claim is paid considering 50% depreciation and  the insured may have to pay remaining cost of replacing. In case customer has opted for zero depreciation add on cover, then the claim is paid for entire value.

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