Understanding Health Insurance After Policyholder's Death

With inflation in the healthcare sector, it has become important to buy a health insurance policy. It is a financial asset that financially protects individuals against medical emergencies. In India, there are many health insurance companies that provide a wide variety of health policies. Some of these include family floater health insurance, individual health insurance, a critical illness plan, and others. Each policy provides separate features and benefits to the policyholders. Let’s understand better with an example. 

Mr Rakesh bought a family floater health insurance policy, and Mr. Vinayak bought an individual health insurance plan from InsuranceDekho. When Mr Rakesh died due to an accident, his family floater plan was still active and was providing coverage to the remaining members of the family. However, when Mr Vinayak died in an accident, his health insurance policy was terminated. However, her wife (a beneficiary of his policy) got a claim amount for all the treatment costs and medical bills incurred during Vinayak's treatment. 

As seen in the above example, each health insurance policy has different outcomes when the policyholder dies. So, let’s find out what happens to a health plan after the death of the policyholder in each type of policy. 

What Happens To Health Insurance After the Policyholder's Death?

Here’s the impact of the death of a policyholder on each type of health insurance policy. 

• Family Floater Health Insurance Plan: 

As the name suggests, a family floater health plan is a policy in which all the family members are covered under the same policy. Under this family health coverage plan, after the demise of the primary policyholder, the remaining family members continue to receive coverage. As seen in the above example of Mr Rakesh, the other family members were still getting health insurance coverage. However, in order to continue receiving the benefits, the other family members may have to make timely premium payments. 

• Individual Health Insurance Plan: 

An individual health insurance policy covers only one person. Therefore, the insurance will become null and void upon the insured's death. If the insured chooses his or her spouse or another family member as a nominee, he or she will receive death benefits following the death of the policyholder.

• Senior Citizen Health Insurance:

After the policyholder's death, the policy becomes invalid. For instance, Rahul bought senior citizen health insurance for his 80-year-old father. Therefore, when his father died, Rahul was only able to claim the treatment bills and expenses. Thus, no death benefit is given in this type of policy. 

• Critical Illness Health Insurance: 

In order to get benefits under a critical illness health plan, the insured must live for a specific amount of time after being diagnosed. If the policyholder is during this term, the policy is rendered null and invalid. Moreover, no death benefits are given under this type of policy. 

For example, a person is diagnosed with cancer two months after purchasing critical illness insurance. The critical illness coverage has a 30-day survival period, yet the insured dies within 10 days of diagnosis. According to the policy's terms and conditions, his or her family will receive no benefits.

• Group Health Insurance Policy:

A group health insurance policy is a type of policy that is provided by an employer to its employees. In the event of the death of an employee, the dependents will not be covered unless specifically stated in the policy. If there is a death benefit clause in a policy, the beneficiaries of the policy will receive compensation. 

Conclusion

In conclusion, there are different types of health insurance plans. However, the most suitable one is the family floater health insurance plan, as it continues to provide coverage to the other insured members even after the death of the primary policyholder.

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