To safeguard our financial stability in the event of a medical emergency, we purchase family health insurance plans. Nevertheless, have you ever thought about what would happen to the healthcare plan if the policyholder passed away? The death benefit clause that is specified in the insurance is not often well-known by policyholders.
How to check for death benefits in the policy document
A family floater health plan, however, will continue to pay benefits to the other covered members even after the policyholder passes away. But, there is one requirement: The policy must be renewed on time.
Examples of the different types of coverage and how passing away affects health insurance
- Individual health insurance plan
An individual is covered by an individual health insurance policy. Consequently, upon the insured’s passing, the policy will be void. If the insured names his or her spouse or another member of the family as a nominee, that person will receive the insurance proceeds or death benefits following the passing away of the policyholder. For instance, Rahul named his wife as the nominee on his individual medical insurance purchase. After being hospitalised for 10 days, he regrettably passed away from a serious illness. *
- Family floater health insurance
If the primary insured person passes away, the other family members will still be covered under this form of family health insurance plan. This is so that a family floater can cover everyone under a single plan. The insurance company must be notified of the passing away if the primary insured member was the one who was paying the premium so that the insurer can modify the current policy. For instance, during the policy period, the principal insured member of a four-person family, Karan, suffered an accidental passing away. His wife had to be hospitalised a few days after this terrible incident, and the associated medical costs were close to Rs 5 lakh. She was left with the costs because she was not aware of the advantages of a family floater health plan’s coverage. She was qualified to submit the costs because the policy was still in effect. *
- Group health insurance
This type of health insurance plan is provided to employees by their employers, who also determine the benefits and policy coverage. After the employee’s passing, the policy will no longer be in effect, and the dependents won’t be covered unless it is specifically stated in the policy. The next of kin will be compensated if the policy has a death benefit clause. The list of remaining dependents will be added to the policy in a different circumstance. For instance, Sahana’s employment provided group health insurance for her and her family. Sahana’s company offered compensation to the family following her tragic accidental passing away but discontinued providing coverage benefits because the policy lacked such a clause. *
- Critical illness insurance
To be eligible for benefits under a critical illness plan, the insured must live for a specific amount of time after being diagnosed. If the insured member passes away within this time, the policy will be void. It doesn’t provide rewards upon passing away. For instance, a person may be diagnosed with cancer two months after purchasing a critical illness health insuranceplan. The policyholder passes away within 10 days of diagnosis, notwithstanding the critical illness coverage’s 30-day survival period. *
- Senior health insurance
If the insured passes away, the coverage is no longer valid. For instance, Mr. A bought his 70-year-old father, senior citizen health insurance plan. The insurance provider only covered his medical bills after he passed away; there was no death benefit provided.
A health insurance premium calculator is a tool you may use online to determine the amount of coverage required based on your needs.
* Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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