Why Should You Nominate Your Loved Ones Under Your Health Insurance?

By now, you must have acknowledged the significance of having a health insurance policy to safeguard you financially in a health-related emergency. However, to guarantee that your family members or dependents receive all of the advantages of your insurance plan, you must choose a nominee under your health insurance policy.

The risk of contracting various diseases is rising daily due to our modern lifestyle. Health insurance coverage secures you and your loved ones economically in a medical emergency. When a person dies due to a health-related incident, their nominated family members (nominees) can be financially secure. However, the role of nominees in health insurance is different in health insurance compared to that of other insurance products. Usually, the role of nominees in health insurance comes into play during accidental hospitalisation. If the treatment happens at a hospital other than the list of network hospitals of the insurers, only a reimbursement claim option is available. So, if the insured dies in that setting, the nominee of the deceased policyholder will receive the sum insured. Continue reading to learn more.

What is a Nominee?

A nominee is an individual or a group of individuals nominated for health insurance benefits by the policyholder. If the policyholder dies while receiving medical treatment, the nominee will be entitled to the promised sum. A health insurance plan, like life and personal accident insurance, allows the nominee's name to be submitted.

The insurance policy agreement should include the nominee's name. Although it is not required to designate nominees to support your family during a crisis financially, you must consist of one person's name in the insurance proposal. You may appoint friends or direct family members, such as your spouse or children. However, you should nominate an immediate family member because your family will require emotional and financial support when you experience an unintentional hospitalisation.

Benefits of Health Insurance to Nominees 

You must notify your insurance provider about who you have named as your policy's beneficiary. Furthermore, if some problem occurs with your health, you may ensure that your family members are financially safeguarded.

Financial Assistance for Your Family

In the event of a fatality, the entire family of the departed suffers, and substantial medical fees may add to their financial burden. However, by nominating someone, you ensure that there will be no financial concerns.

Protect Your Dependents 

You must financially protect those who rely on you. And you may help them overcome financial obstacles in the future by including them in your health insurance policy.

Equally Distributed Benefits 

If you have chosen multiple candidates for nomination, the claim benefit might be divided equally among them.

Avoid Legal Difficulties

If you pass away without naming a nominee, your health insurance company will have to find your legal heir to pay your claim. Because this may include multiple people, it may need court arbitration and other issues for your family. 

In short, naming a nominee under your health insurance coverage will ensure that there are fewer problems in the instance that the worst occurs. In addition, for your loved ones, it might slightly ease a difficult circumstance.

Who Should You Pick for Your Health Insurance Plan's Nominations?

There are no significant restrictions on who you can choose as a candidate for your health insurance plan. It's possible to suggest people from your immediate family, like parents, spouses, children, or extended family. Possibly, even your friends.

You can also put forward a minor (one who's below 18). However, as the minor cannot legally manage the amount of compensation until they are an adult, you will also need to include a guardian or appointed representative in this situation.

Remember that your legal heirs will receive the claim amount if a nominee passes away before the policyholder. Again, either you or the courts decide this according to your wishes.

Overall, it is a good idea to designate your closest adult relatives as your nominees, especially since the claim amount may be able to offer crucial financial help during a trying time.

How Do I Add or Change a Health Insurance Nominee?

You can provide the nominee information if you buy your health insurance policy offline or online. However, you can change your nominee at any moment by notifying your insurance company.

At the time of renewal or while the policy is in effect, adding or removing people from the list of nominees is also feasible. Likewise, you can get in touch with your insurance provider.

Which Information Must Be Provided to Nominate Someone?

To ensure no issues while presenting a claim, it is critical to provide  accurate information about the candidate. This comprises:

Personal Information - Full name, birthdate, age, and address. A legitimate identity verification, such as a copy of a driver's licence.

Proof of the Relation - Information about your relationship with the nominee, mainly if they are a distant relative.

The Significance of Nominees in Health Insurance

A nomination for your health insurance is crucial since it can protect your loved ones' cash in case you die while receiving treatment at a hospital. For example, suppose you are admitted to the hospital for an extended time and an unfortunate accident occurs while you are there. In that case, the designated person will be compensated for your insurance benefits. The insurer must determine the legal heir to receive the benefit if the insured passes away without designating a beneficiary. Multiple claims could be involved in the case of not nominating anyone, and family members might experience conflict. The nomination thereby avoids these inconveniences.

The procedure is more manageable if you have group health insurance that covers you and your family. In such a scenario, the insurance will transfer the sum to another member following the death of a member. From that member, the legal heir may make a claim later.

Conclusion

The importance of nominees in health insurance cannot be overstated. It offers a financial safety net for the deceased person's dependents in the event of death and can help avoid disagreements. In addition, anyone can serve as your nominee, including children. As a result, while selecting a health insurance plan, it is critical to make the appropriate decision and allot a nominee.