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What Happens to Health Insurance After Policyholder's Death?

Posted On : 28 September 2023, 6 Months Ago. Blog Total Read 933

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Life is an extraordinary journey filled with precious moments and unforeseen challenges. Throughout this expedition, health insurance stands as a guardian, shielding us from the uncertainties of medical expenses.

However, when the inevitable occurs, and a policyholder departs, the question arises: What will happen to their health insurance policy?

How to Review the Policy Documents for Death Benefits?

It is crucial to review the terms and conditions of a health plan before purchasing to understand the death benefit provision. You must determine whether your family members will remain covered in the event of your demise or if the coverage will be rendered void. If you opt for individual medical insurance, the policy will cease upon your death, and the nominee will receive the death benefit insurance.

If there is no nominee, the settlement process may involve legal complexities. It is important to designate a nominee when obtaining individual health policies for each family member. Conversely, with a family floater health plan, the other insured individuals will continue to receive benefits even after the policyholder passes away, provided the policy is renewed promptly.

Types of Policies and What Happens After Death to These Policies?

Let's examine how the policyholder's death affects each form of health insurance plans and what exactly happens to the coverage.

Individual Health Insurance Policy

The policyholder can receive the full insured amount in an individual health insurance policy. This plan allows the policyholder to claim hospitalisation expenses and other benefits such as Day Care treatments and ambulance expenses.

➔ Death Benefit

If the individual health plan only covers one insured member- the policyholder, the policy will terminate upon their death. However, in the event of the policyholder's death during hospitalisation, the family member can still file a claim.

In the case of individual medical insurance, it is also possible for the policyholder to include their spouse as the second insured member. In such a scenario, the nominated spouse will continue to receive insurance benefits in the event of the policyholder's demise.

Family Floater Health Plan

Under a Family Floater Health Plan, the immediate family members of the policyholder receive health insurance coverage and benefits. The sum insured is shared among all members until it is fully utilised.

➔ Death Benefit

In the unfortunate event of the primary insured member's death, a Family Floater Health Insurance Policy continues to provide coverage to the remaining insured members. If the person responsible for paying the premiums passes away, the next of kin must inform the insurance company of the death. The insurer will endorse the current policy and provide the updated policy details.

Group Health Insurance Policy

An employer typically provides a Group health insurance policy to their employees. It operates similarly to a Family Floater Health Plan. Still, the employer holds significant control over the policy and its benefits as they are responsible for paying the premium for basic health insurance coverage.

➔ Death Benefit

The policy will cease in the unfortunate event of the employee's death. Unless explicitly stated in the policy, coverage cannot be extended to dependents. However, if a death benefit insurance clause is included in the policy, the next of kin may receive a lump sum.

Alternatively, if a covered family member passes away, the policy will be updated with the remaining dependents listed. As a result, the other family members can continue to access health insurance coverage.

Critical Illness Plan

The Critical Illness insurance is a health insurance plan that provides a lump sum payout to the insured member if diagnosed with a specified illness.

➔ Death Benefit

Typically, a Critical Illness plan does not include a death benefit. The insured must survive several days after the diagnosis to make a claim. If the insured member passes away during this period, the policy becomes void, and no benefits can be claimed.

Senior Citizen Health Insurance

Senior Citizen Health Plan is a health insurance plan that shares similarities with an Individual Health Insurance Policy. However, it specifically caters to individuals who are 60 years of age or older.

➔ Death Benefit

In the event of the insured person's death, the policy will be terminated and no longer remain in effect.

Summing Up

It is very important that you understand the death clause of your policy and communicate it to your family. For instance, with Niva Bupa Family Floater, the policy can continue if premiums are paid, and accurate information is provided, allowing another insured member to take over payments after the policyholder's demise. However, don't assume uninterrupted coverage after the policyholder's death—make an informed decision and establish a financial backup when purchasing health insurance.

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Secure your health with comprehensive insurance plans from Nivabupa

Tell us a bit about you

Whom are you buying for ?

Individual

Husband & Wife

Family

Name Enter valid name

Date of Birth Enter Valid DOB

Mobile Number

OTP sent Resend OTP

OTP

OTP Expires in

I authorize Niva Bupa to call me. This will override your existing registry in DNCR. I want to get my quote and policy details on WhatsApp.

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