What is Insured and Beneficiary in Health Insurance?

When you buy health insurance, there are terms you’ll come across like ‘insured’ or ‘beneficiary’. Although they may seem technical and difficult to understand at first, they’re pretty simple. Let’s walk you through what these two terms mean, what role they play in health insurance, and why understanding the difference between the two is important for anyone who wants to purchase an insurance policy.

When you buy health insurance, there are terms you’ll come across like ‘insured’...

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Insured & Beneficiary in Health Insurance

The insured and the beneficiary in health insurance are the core of any policy. The insured is the person whose health or medical expenses are covered under the insurance policy. The beneficiary is the person who actually gets the benefits of the policy. Most of the time these two people are the same. However, that is not always the case. If you buy health insurance for yourself, then you are both - the insured and the beneficiary. But, in cases of family plans, you become the insured and your spouse, your parents, or children become the beneficiaries which means they are also covered under your plan. Sometimes there can be more than one insured person depending on the details mentioned in the policy.

Key pointers about the insured

The insured is the person whose health is covered under the insurance policy.
Their policy will take care of expenses such as doctors visits, surgeries, hospital stays and certain treatments that would be mentioned in the policy.
The insurance policy is usually issued in their name.
They are responsible for paying the premium unless the policy is purchased by someone else, for e.g. an employer
It can be a singular person or more than one in cases of family plans.

Key pointers about the beneficiary

A beneficiary is the person who receives the benefits of the health insurance policy.
They are the ones who enjoy the benefits of the policy like cashless treatment or certain health services, and reimbursements.
Most of the time the beneficiary can be the same as the insured
When it comes to family plans, the dependents mentioned in the policy like spouses, parents or children are the beneficiaries of said policy.
The beneficiaries' names need to be clearly mentioned in the policy.

Difference between Insured and Beneficiary

	Insured	Beneficiary

Meaning	A person or persons whose health is insured in the policy	A person or persons who enjoys the benefits of the policy
Coverage	Medical costs are covered by policy	Receives medical care or reimbursements
For Individual plan	Usually the same as beneficiary	Usually same as insured
For Family plan	May or may not be the policyholder as well	Dependents mentioned in the plan - spouse, parents or children
Premium	May or may not pay the premium	Does not pay the premium
Managing policy	May or may not manage the policy	Does not manage the policy

Real-Life Examples

In case you’re still confused by the two terms, let’s take a look at it with some real-life examples:

Individual plan

Sarika decides to buy a health insurance plan for herself. This makes her the insured person because she has taken the policy for herself, and it also makes her the beneficiary because it is for her and her alone. She has no dependents that need to be added to the policy. Hence, she becomes the insured and the beneficiary.

Family plan

Dheeraj wants to buy a health insurance policy that covers him, his wife, and his two children so he picks the family plan. Over here, Dheeraj becomes the policyholder as well as the insured and his wife and children become the dependents or the beneficiaries in the policy. His medical expenses will be covered and his wife and children will receive the benefits of the insurance policy.

Conclusion

To sum it up, the insured is the person whose health is insured under the policy and the beneficiary is the person or people who receive the benefits of said plan. They might seem like the same thing but they have some differences and understanding them will in turn help you understand your policy better too. It’ll help you understand who plays what role when it comes to an insurance policy, reduce any confusion during an emergency, and make your overall experience a super smooth one.

Frequently Asked Questions

Can I be the insured and the beneficiary?

Yes. If you are purchasing the policy for yourself then you become the insured and the beneficiary which means your health is insured and you get the benefits of the policy.

Does the beneficiary need to be related to the insured person?

Not necessarily, it would depend on the insurance company’s rules but in most cases, people usually put their spouses, parents or children as beneficiaries.

In family insurance plans, who becomes the beneficiary?

In most family plans the dependents mentioned in the policy become the beneficiaries. People usually put their spouses, children or other family members as beneficiaries.

Is it possible to have more than one beneficiary?

Yes. You can have multiple beneficiaries in a family health insurance plan. They are all listed in the policy as per approval from the insurer or insurance company.

If I am the insured person, can I make changes to the policy?

Yes, you can make changes to the policy but only if you are also listed as the policyholder in the same policy. Keep in mind that a beneficiary cannot make any changes to the policy.

What will happen if the beneficiary’s name is wrong in the policy?

If the beneficiary's name is wrong in the policy it could lead to problems like funds or reimbursements not being transferred to your account and other verification issues.

Written by Roocha Kanade

2.5K Linkedin Followers

Reviewed by Dr. Harshita Dahiya

Health Insurance content enthusiast who turns complex topics into easy, binge-worthy reads—fueled by SEO, creativity, and way too much chai! Loves juggling multiple projects, cracking impossible deadlines, and sprinkling humor into the mix. When not geeking out over digital trends, you'll find her lurking on Quora and Reddit, planning the next getaway, or passionately decoding all things health and insurance!