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Nominee in Health Insurance

Ensure your loved ones' financial security with a nominee in health insurance.

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Home / Health Insurance / Articles / Nominee in Health Insurance

Due to the evolutionary lifestyle, the risk of diseases is increasing day-by-day. Having a health insurance policy protects you and your loved ones financially at the time of a health-related crisis. Sometimes health-related mishaps lead to the death of a person, in such a situation his/her nominated loved ones (nominees) can be financially secured.  Read ahead to know more about the role of a nominee in health insurance.

What is a Nominee in Health Insurance?
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A nominee is a person or a group of members, nominated by the policyholder for health insurance benefits. If the policyholder loses his/her life during medical treatment, the assured sum will be entitled to the nominee. Similar to Life and Personal Accident Insurance, a Health Insurance plan also offers the option to submit the nominee’s name.

The nominee’s name should be mentioned in the insurance policy agreement. Even though it is not mandatory to specify nominees, to financially support your family in a crisis time you need to mention one person’s name in the insurance proposal. You can opt to nominate any of your friends or immediate family members such as spouse or children. However, it is wiser for you to nominate your immediate family member(s) as your family needs emotional and financial support during an accidental hospitalization.

What are all the Nominee Details Required?
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While adding nominee names to a health insurance policy, you need to submit a few details about the enlisted person such as their full name, age, date of birth, address, and the relationship he/she shares with you. Putting incorrect information may lead to complications at the time of the insurance claim.

A policyholder can change the nominee and appoint a new one by informing his/her insurer. If the nominated person dies before the policyholder, the insured amount will go to the legal heirs.

Importance of Nominees in Health Insurance
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It is extremely important to nominate someone for your health insurance policy as it can save your loved one’s finances in times of need. In case, you get hospitalized for an extended period and an unfortunate mishap occurs in the hospital, the insurance benefits will be paid to the nominated person. If the insured dies without making a nomination, the insurer has to identify the legal heir to receive the compensation. Such a situation may include multiple claimants and can cause complications among family members. Thus, the nomination discards such hassles.

The process is simpler if you and your loved ones are insured with a group health insurance policy. In such a case, after the death of a member, the insurer will transfer the amount to another member. The legal heir can claim from that member. 

Challenges Faced by Nominees and How to Overcome Them
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Being a nominee for someone's health insurance policy can be confusing. You may struggle with paperwork, navigating claims procedures, and figuring out taxes. Here are some tips:

Staying organised and seeking assistance early on can help overcome many hurdles.

Benefits of Nomination in Health Insurance
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Nomination in health insurance serves the following aspects in the health insurance sector

Support your Dependents
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Nominating your family member may reduce the financial burden even in your absence. It serves the actual purpose of insurance for you and your loved ones. The insurance agreement will end only after compensating the predetermined death benefits to the nominees. The death benefits may help your dependents to overcome financial hurdles in the future.

Eliminate Complications
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Nominating people eliminates the complications for the insurance companies. The insurer may face difficulties in selecting the right descendant for compensation if no nominees are enlisted in the insurance agreement. Thus, the policyholder should nominate the right person on his own free will to eradicate the complication of determining the right beneficiary.

Sharing the Death Benefits
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The death benefits will be equally shared among the mentioned nominees if multiple names have been mentioned by the policyholder. In an unfortunate case, if one of the nominees does not survive, another nominee receives the assured sum. 

Importance of Updating Nominee Information
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Life situations change. As the policyholder, update nominees if you get married, have children, or if an existing nominee passes away. Outdated information can delay settlements and may require going through lengthy legal processes before the right heirs get proceeds.  

Review nominee details at least every 3-5 years. Log in to the insurance portal or contact the insurer for the change request form. It takes little time but saves nominees from future struggles.

The Role of a Guardian in the Case of a Minor Nominee
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If the nominee is a minor, the claim amount is given to their appointed guardian, who manages it on the child's behalf. As a policyholder and parent, you can choose the guardian - another family member, relative or friend willing to take up responsibility.  

The guardian must submit all documents verifying the relationship with the minor and get the insurer's approval. They manage withdrawals only for necessary child expenses and transfer funds once the nominee becomes an adult. Choose a guardian wisely for your child's security.

Tips for Choosing the Right Nominee for Your Health Insurance Policy
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Here are tips when naming a nominee who can adequately utilise policy benefits if you are no longer there:  

Single Nominee vs Multiple Nominees
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Below are some criteria for having a single nominee vs multiple nominees

Single Nominee

Multiple Nominees

A policyholder can opt for a single person as a nominee to receive the insured sum after he/she loses his/her life during the medical treatment.

A policyholder can opt for multiple nominees among his/her family members or friends who will be entitled to the assured sum after the death.

The nominated person can make a claim via the cashless or reimbursement method by which the assured sum will be directly transferred to the nominee’s account.

After receiving the assured sum, the multiple nominees can share the financial benefits equally among themselves.

A single nominee can be a legal heir, spouse, or one of the parents.

Multiple Nominees can be your family members, close friends, or children.

Who is a Minor Nominee?
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The nominee can be considered a minor if his/her age is below 18. The policyholder can nominate a minor person for the benefits, however, the minor will not be eligible to receive the assured sum till he/she reaches the age of 18. Meanwhile, the amount will be paid to the appointee as declared by the insured person.

Who should be the right nominee?
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Choosing the right nominee is very crucial for a health insurance policy as the insured amount will be paid to the nominee after the unfortunate demise of the policyholder during the medical treatment. The policyholder can nominate his/her parents, spouse or children. However, in some cases, he might choose distant relatives such as an aunt, uncle, nephew or niece. In this situation, a policyholder must submit the necessary documents to declare distant relatives as nominees. The agreement will represent that the nomination has been done on his own free will. Failing to do so may result in the cancellation of the claim request.

The Final Word
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Nominees play an important role in every insurance sector, especially in health insurance. So it is wiser for you to mention nominees to guard them financially in your absence.

Frequently asked questions
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Here are a few answers to the common questions related to the above-mentioned topic:


What is the major role of a nominee in health insurance?

The nominees receive the predetermined assured sum after the unfortunate demise of the policyholder during his/her medical treatment. So they are the legal custodians of the insurance benefits after the death of the insured.

Who can appoint a nominee?

The policyholder himself should mention the names and details of the nominees. Putting incorrect information about the nominees may lead to complications at the time of claim.

Can a non-family member be a nominee?

Yes, a non-family member such as a close friend can be nominated as a beneficiary.

What is the difference between a legal heir and a nominee?

A legal heir is someone who is entitled to succeed the properties of the deceased policyholder but a nominee is a nominated person by the policyholder to receive the insured amount after the demise of the policyholder. If the nomination is not done, the assured sum may transfer to the legal heirs.

Is it mandatory to be nominated for a health insurance policy?

No, it is not mandatory to nominate a person in a health insurance policy. However, it is advisable to nominate an immediate family member or a close relative to avoid complications while reimbursing the assured sum after the death of the policyholder.

Can I cancel my nomination during a policy period?

Yes, you can cancel your nomination during your policy period.