Nomination in Your Health Insurance Plan: Why It's Crucial

The rising cost of healthcare services has indirectly led to the increase in the number of people who are purchasing a health insurance plan, both online and offline. The policy helps in coping with this increased cost of healthcare, especially for those who are not able to afford it easily during medical emergencies. However, often times most buyers tend to ignore one aspect of the process: naming a nominee.

What is Nomination in a Health Insurance Plan?

Nomination in health insurance refers to the process of selecting a person who will receive the policy benefits in case of the policyholder's demise. It is a crucial step in ensuring that the policy benefits are passed on to the intended beneficiary. The person nominated by you is called the nominee.

Why Are the Benefits of a Nominee in Health Insurance?

• Ensures Claim Settlement: Nominee receives the claim amount in case of the policyholder's death.
• Avoids Legal Delays: Smooth transfer without court intervention or probate.
• Fulfils Financial Needs: Helps family cover ongoing medical expenses or hospital bills
• Reduces Conflicts: Clearly defined nomination avoids family disputes.
• Legal Protection: Provides clarity on the rightful recipient of insurance benefits.

Having nominee details updated is important to fully utilise benefits, especially with access to 18,400+ cashless hospitals under plans from Bajaj Allianz General Insurance Company.

Importance of Nomination in Health Insurance

Here are some reasons why it is important to name in a nominee in the policy:

1. Ensures Smooth Settlement of Claims

Nomination in health insurance ensures that the policy benefits are passed on to the right beneficiary in case of the policyholder's demise. This helps in the smooth settlement of claims and avoids any legal complications that may arise due to the absence of nomination.*

2. Avoids Disputes Among Family Members

The absence of nomination can lead to disputes among family members over the distribution of the policy benefits. This can create unnecessary tension and bitterness among family members. Nomination ensures that the policy benefits are passed on to the intended beneficiary, thus helping one avoid any disputes.*

3. Provides Financial Security to Family Members

Health insurance provides financial security to the policyholder and his/her family members in case of medical emergencies. Nomination ensures that the health insurance benefits are passed on to the family members, thus providing them with financial security even after the policyholder's death.*

4. Saves Time and Effort

Nomination in health insurance saves time and effort in case of the policyholder's demise. The nominee can easily claim the policy benefits without going through any legal formalities, thus saving time and effort.*

5. Reduces the Burden on Family Members

The sudden demise of the policyholder can be emotionally and financially overwhelming for the family members. Nomination in health insurance reduces the burden on the family members by ensuring that the policy benefits are passed on to the intended beneficiary.

Also Read: Impact Of GST On Hospital Room Rent

Types of Nominees in Health Insurance

Here are some of the types of nominee who get the health insurance benefits on your behalf:

1. Beneficial Nominee

A nominee who is your immediate family member is called a beneficial nominee. It is important to note that only an immediate family member can be named as a beneficial nominee.

2. Minor Nominee

A nominee who is below the age of 18 years at the time of being named as a nominee is called a minor nominee. When naming a minor as a nominee, you are also required to name an adult as an appointee for the nominee. If something unfortunate were to happen to you during the policy term while the nominee is still a minor, the appointee will receive the benefits; holding on to it till the nominee is of legal age.

3. More Than One Nominee

You have the provision of naming more than one nominee in your policy. You can name multiple nominees, among whom the benefits will be distributed.

What Nominee Details are Required?

When buying or renewing a health insurance policy, it’s crucial to nominate someone who will receive the claim amount in case of the policyholder’s death. The nominee’s full name, age, relationship with the policyholder, and contact details such as address, phone number, and ID proof (Aadhaar, PAN, etc.) are required. This information ensures a smooth and rightful transfer of benefits. Insurers like Bajaj Allianz General Insurance Company simplify this process through online forms and quick approvals, helping secure the nominee’s rights efficiently.

Who Can Be Chosen as a Nominee?

A nominee is the person designated to receive the health insurance claim amount in case of the policyholder’s death. Ideally, immediate family members such as a spouse, children, or parents are preferred. However, policyholders also have the flexibility to nominate extended family members, friends, or even trusted legal guardians.

Nomination rights extend to:

• Spouse: Most common choice for married individuals.
• Children: Especially if they are financially dependent.
• Parents: For young policyholders or singles.
• Siblings or other relatives: If the nominee is close and trustworthy.
• Non-family members: Allowed, but may require additional documentation to establish insurable interest.

Minors can be nominated, but a legal guardian must also be appointed.

Also read: Types of Health Insurance

How to Nominate a Person in Health Insurance?

Nomination in health insurance is a simple process that can be carried out at the time of buying the health policy or at any time during the policy period. The following are the steps involved in nominating a person in health insurance:

Fill the Nomination Form

The first step in nominating a person in health insurance is to fill the nomination form. The form can be obtained from the insurance company or downloaded from their website.

Provide Nominee Details

The next step is to provide the details of the nominee such as the name, age, address and the relationship with the policyholder.

Provide the Percentage of Share

The policyholder needs to specify the percentage of share that the nominee will receive in case of the policyholder's death. If there are multiple nominees, the policyholder needs to specify the percentage of share for each nominee.

Submit the Form

Once the form is filled, the policyholder needs to submit it to the insurance company along with other required documents.

How to Choose the Right Nominee for Your Health Insurance?

• Trust Factor: Choose someone who understands your medical and financial interests.
• Relationship: Prefer close family members or legal dependents.
• Age Consideration: Ensure they are legally eligible or appoint a guardian for minors.
• Availability: The Nominee should be reachable and aware of the policy.
• Documentation: Select someone with valid ID proof for smooth verification.

What is the Process for Nominee Claims?

In case the policyholder passes away, the nominee must follow a few key steps to file a health insurance claim:

1. Notify the Insurer: Inform the insurer at the earliest through call, email, or website.
2. Submit Required Documents: These typically include the death certificate, policy copy, identity proof of the nominee, and completed claim form.
3. Verification: The insurer verifies the relationship between the policyholder and nominee and checks all documentation.
4. Claim Assessment: If the claim is valid and documents are in order, the insurer processes the payment to the nominee’s account.
5. Resolution Time: Most insurers settle valid nominee claims within 30 days.

What Challenges Do Nominees Face and How Can They Be Resolved?

• Lack of Nominee Registration: If no nominee is registered, claim processing is delayed and may involve legal heir verification.
  Resolution: Always ensure nominee details are filled during policy purchase.
• Incorrect or Outdated Information: Wrong nominee data may lead to claim rejection.
  Resolution: Keep nominee details updated regularly.
• Nominee Is a Minor: In such cases, a guardian is required for legal representation.
  Resolution: Assign a responsible adult as guardian while nominating a minor.
• Multiple Claimants or Family Disputes: This can result in legal complications.
  Resolution: Clearly specify the share percentage if multiple nominees are added.
• Unawareness of Policy Details: The nominee may be unaware of the policy or claim process.
  Resolution: Inform your nominee and keep documents accessible.

How Does Health Insurance Support the Nomination Process?

Health insurers now offer simple online and offline methods to register or update nominee details. At policy purchase or renewal, forms include a section for nominee information. Policyholders can also modify the nominee anytime during the policy term. Some insurers even allow multiple nominees with defined percentages.

Conclusion

Nomination in health insurance is a simple yet crucial process that ensures that the policy benefits are passed on to the intended beneficiary in case of the policyholder's death. It provides financial security to the family members and reduces the burden on them during the difficult times. For any other doubts related to nomination or other aspects of the policy such as health insurance claim, you can get in touch with an insurance agent. 

FAQs

What happens if you don’t have a nominee in your health insurance policy?

The insurer may ask for succession certificates or legal heir documentation, which could delay claim settlement.

How is a nominee different from a legal heir?

A nominee is authorised to receive the insurance payout, but legal heirs have rights over estate distribution.

Is having a nominee mandatory in health insurance?

It’s not legally mandatory but strongly recommended to avoid disputes and delays.

Can you have more than one nominee in a health insurance policy?

Yes, multiple nominees can be appointed, often with defined share percentages.

Can a minor be appointed as a nominee?

Yes, but a legal guardian must be named to receive benefits on their behalf.

Can a non-family member be named as a nominee?

Yes, provided there’s an insurable interest and proper documentation is furnished.

Who is the nominee in a family floater health insurance plan?

Usually the primary policyholder chooses a nominee for the entire floater plan.

Who has the authority to choose a nominee?

Only the policyholder or proposer can assign or change a nominee.

Is it compulsory to assign a nominee in a health insurance policy?

Not compulsory, but highly advisable for seamless claim processing.

Can you withdraw or change your nominee during the policy term?

Yes, nominees can be updated at any point during the policy tenure.

Can a nominee become the owner of the policy?

No, nominees only receive the claim amount; they don’t assume policy ownership.

*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.