A nominee is the person who receives the benefits of an insurance policy in the event of the policyholder’s passing. Most of us are aware that life insurance plans require nominees. However, very little is discussed on the need of having a nominee for health coverage too.
In this article, we will explore the importance of having a nominee for your health plan and offer a few tips to guide you in the process of nomination.
Why does my health insurance plan need a nominee?
A health insurance policy offers a financial safety net by protecting your savings in case you fall ill. Medical treatment can be costly – inflation sees hospital charges on the upsurge. A single bout of sickness can wipe your bank account clean. This is where a health plan steps in to minimize your out-of-pocket expenses.
Health insurance may be cashless or paid as reimbursement to the policyholder. However, in some cases, a patient may tragically die during treatment if their health was already in a precarious state. In this situation, the insurance company still pays the claim due to the policy nominee.
Therefore, as one can see, the nominee has no part to play in the normal course of a health insurance policy. Yet, if the policyholder dies, they can receive the amount due in the plan.
It is extremely important to ensure that your health insurance has a nominee. Making a nomination is not mandatory but rather, a good practice to follow. This is because the sudden passing of the insured person in the course of medical treatment can be devastating for their family members – emotionally and financially. The grief experienced is compounded by a sudden deluge of expenses that still need to be paid. Nominating one’s heirs in a health policy will play a part in ensuring that they do not have to worry about their financial responsibilities even as they mourn the loss of a loved one.
Tips to follow when naming a nominee
Nominating a person to your health insurance is a fairly simple process. When you purchase your health insurance policy, you will be asked to provide nominee details on a form. Here are some tips to follow when filling up nominee information:
- Check that there are no errors in nominee name and address
- If the nominee is a minor make sure to fill up the correct details of an adult guardian
- Preferably nominate family members who might be directly impacted (financially) if you pass on
Do note that you can change the nominee at any time simply by contacting your insurance provider and following the steps as per their system.
A health insurance plan is one of the most important financial products you will ever invest in. Make sure to read and compare different policies and choose the one that suits you the best. Never wait for your policy to lapse before renewing it as you leave yourself and your loved ones exposed to great monetary loss in the event of a health crisis.