As per the official records, the ongoing Covid-19 pandemic has claimed lives of over 3 lakh Indians so far and thousands of people are still dying everyday due to the viral infection and complications related to the highly contagious disease.
With many holders of health insurance policies among the casualties, it’s important to know the effect of death of an insured person on an active health insurance policy.
Personal health insurance policies may be of two types – individual policy and family floater policy.
The benefits and the amount of sum insured remain fixed for an insured member in an individual health insurance policy. However, if more than one person take an individual policy jointly, health insurance companies provide some discount in premium.
So, hospitalisation, claims etc of an individual don’t affect the benefits of other members in a joint individual health insurance policy.
In a family floater policy, the sum insured floats freely and any member may get the claim settled on hospitalisation. Once a claim is settled, the available sum insured gets reduced for the remaining period of the policy year.
For example, a Rs 5 lakh family floater policy is renewed in April every year. If one of the four insured family members gets hospitalised and a claim of Rs 3 lakh is settled in August, the sum insured available for the next seven months will be Rs 2 lakh.
So, there is an effect of hospitalisation, claims etc on the benefits available in a family floater health insurance policy.
But what happens when a hospitalised member dies?
On death of an insured family member during hospitalisation, other surviving members may request the insurance company to process the claim request and settle the claim.
What happens to a policy after the death of an insured member?
“In case of death of any insured member, the proposer has to communicate the same to the insurance company. The deceased insured member would be deleted from the cover and the premium would be refunded as per the policy terms and conditions,” says T A Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance.
What happens when the proposer of a policy himself/herself dies?
“In case of the death of a proposer, the family needs to send a communication to the insurance company about the same since the proposer has to be changed in the policy. In this scenario a new form has to be filled with a new proposer. The insurer changes the proposer and continues with the policy for other members,” says Ramalingam.
What would happen to a policy, if more than one member (including the proposer) died in hospital?
“In such a scenario, if it is a reimbursement claim the claim proceeds would be paid to the nominee as registered in the policy. For every health proposal we collect nominee details and are printed on the policy. However if it is a cashless claim, the hospitalisation expenses would be paid to the hospital directly so that the dependent members are not burdened for medical expenses,” says Ramalingam.