When death comes knocking on the door, it doesn’t often give you advance notice. While many people fear this, it is also the joy of life. As long as we are alive, we keep on preparing for and planning our future. We take out a health insurance policy for proper treatment in case of illness or accident so that we at least have a fighting chance against death. But even with all the medical advancements and health insurance coverage, death can’t always be prevented. In such cases, the question arises - if the proposer or any other insured person dies, then what will happen to the health insurance policy? This article covers all that you need to know on this subject.

(Read more: What does health insurance cover)

  1. Is death covered in health insurance
  2. Types of health insurance
  3. What happens to the policy in case of death of the insured
  4. If the proposer of health insurance policy dies
  5. If more than one member, including the proposer, dies in hospital

Health insurance provides relief from hospitalization expenses in case of any illness or accident. No survival or death benefit of any kind is provided in it. Survival or death benefit is a term associated with life insurance and term insurance. Both survival and death benefits are available in life insurance, whereas death benefit is available in term insurance.

(Read more: Difference between health insurance and life insurance)

Generally, there are two types of health insurance policies. Individual health insurance policies and family health insurance policies. An individual health policy is one where only one person is insured. An individual can take this policy only for themself or a family member can take an individual health policy for any one person in their own family. In this, the entire sum insured is available for one person.

Family health insurance refers to a policy that covers the whole family. There are two types of family health insurance – family individual policy and family floater policy. In a family individual policy, the entire family is covered under a single policy but each member has their own individual sum insured. For example, if there are four people in a family and they take a sum insured of Rs 5 lakhs for each, then the total sum insured becomes Rs 20 lakhs, but any one person can claim only Rs 5 lakhs. On the other hand, in a family floater policy, the entire family gets one total sum insured. For example, if you take a sum-insured amount of Rs 10 lakh, then any member of the family can claim the full amount up to Rs 10 lakh.

(Read more: Cashless health insurance)

In case of the death of a family member insured included in the family health insurance, it is the responsibility of the proposer to inform the insurance company about the same. After this, the insurance company will remove the name of the deceased person from the health insurance policy and, as per the terms and conditions, the remaining premium will be refunded. Your premium on renewal may also come down due to the loss of one family member. If the person who died was the oldest of the people in the policy, then the new premium may be substantially different.

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In the event of the death of the proposer or the primary insured, it is the responsibility of the family to inform the insurance company of this. It is very important to give this information to the insurance company, as it is necessary to change the name of the proposer in the health insurance policy after the death of the original proposer. In such cases, a new form will have to be filled and submitted in the name of the new proposer to continue the insurance policy and for the rest of the family members to continue getting the benefits of the policy as before. Additional premium can also be refunded as per the terms and conditions of the company. Apart from this, due to the reduction of one member, your renewal premium may also be reduced.

(Read more: Best Health Insurance)

In case of reimbursement, the company pays the claim amount to the nominee if more than one family member dies in the hospital, including the proposer. The nominee is mandatory in every health insurance. If death occurs in the hospital and the hospital is in the cashless network, then the entire cost incurred during the treatment is settled by the company directly with the hospital. If a person has not declared a nominee in health insurance, then the insurance company will ask for a succession certificate from the family before transferring the reimbursement claim.

(Read more: Personal accident insurance)

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