Does Health Insurance Policy Cover Death?

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Is Death Covered by a Health Insurance Policy in India?

Wondering, health insurance covers death or not? When you buy health insurance it is important to know if it would cover death or not.

The unfortunate thing with this is that the health policies in India do not offer coverage for the death of the insured. This means that if you – the policyholder – die even when you are covered by such a policy, it would not offer your family members any death benefit. In fact, in such cases, the policy itself would cease to exist unless other members of the family are covered in the same. You may be wondering why this is the case. Well, these policies are designed to cover the health-related needs of an individual.

The  health insurance policies that you see in the market would provide coverage for the likes of medical, surgical, and hospitalization requirements of the insured. It would cover the medical expenses that may arise in scenarios such as medical emergency, OPD (outpatient department) consultations, planned hospitalization, and diagnostic services. A lot in this case also depends on the plan that you have chosen. This is the reason why the policy would not offer any coverage benefit if the policyholder passes away in the coverage period. It does not matter what kind of policy it is, you are not getting any death benefit from the same.

Accidental death coverage from personal accident insurance plans

So, as you can see for yourself, even the best health insurance policy would not provide you with death coverage. However, you can be sure that the likes of personal accident insurance plans are a lot better in these cases. As opposed to the health plans, these policies do offer your beneficiaries a death benefit in case you die in an accident while you are covered by the same. In fact, this is what these policies are designed for.

They can offer you coverage for disability owing to an accident as well. You can be sure that this is not something that you would get from a policy that offers health insurance coverage no matter how comprehensive it is. So, with a personal accident policy, your family would receive financial assistance if you were to die in an accident. However, please do understand that these policies would not cover a natural death. So, if you raise a claim for such death when you have a personal accident insurance policy the insurer would reject it straight away.

The amount of coverage that you should buy in case of a personal accident policy

We have already established that no matter what health insurance coverage in India, you buy you are not getting any death benefit from the same. So, the question that needs to be asked is how much coverage should we go for when we are buying a personal accident policy – what is the ideal number in these cases? Insurance experts say that you must choose 100 times your present monthly income at the least when you are buying these policies. So, for example, if you are earning 50,000 rupees each month you must go for at least 50 lakh rupees when you buy such a policy.

Since you are not getting any death benefit from a health insurance plan this becomes a necessary step for you. Doing this would make sure that your family has money when it needs it the most. This would help your near and dear ones meet expenses like loan repayment, the marriage of your children, and the education of your children, to name a few, even when you are not physically there to assist them with all these areas in person.

Read More: Types Of Death Covered And Not Covered by Term Insurance Policy

Factors that affect the premiums that you pay for these policies

Just as it happens with the health insurance plans, the premiums that you pay for the personal accident policies also depend on several factors that may be enumerated as below:

  • occupation
  • exposure to risk
  • the coverage amount you have chosen
  • your age

These are just some of the major factors in this particular context. If you work in a risky job you would be a major liability for the insurer and in that case, it could charge you a high premium. The biggest examples of people in such professions are the likes of mountaineers and mine workers. If you are exposed to a lot of risk regularly the insurer would consider you a big liability and charge you a higher premium. So, let us assume that you live in an area that is prone to natural disasters such as landslides. Then you would have to pay a higher premium.

When you choose the best health insurance with the highest coverage amount you have to pay a high premium. That same logic applies to these policies as well. The older you are at the time of buying these policies, the higher would be the premium that you have to pay for the same.

Things to remember while buying personal accident insurance plans

Just as you keep some things in mind when you buy health insurance coverage you need to remember a few factors when you are buying these policies. They may be enumerated as below:

  • type of plan
  • coverage provided by the policy
  • global coverage
  • claim settlement ratio
  • exclusions
  • premium

Coming to type, if you want a policy for your family you can go for a floater policy. The plan that you buy must offer you sufficient coverage to help finance the needs of your family members for the foreseeable future in case of your untimely death.

Conclusion 

The thing with death is that it can come at any time. So, you need to be protected to deal with its ramifications at the very least. It is here that a personal accident insurance plan can be so helpful just as health insurance coverage in Indiaeven though the latter does not provide you with any death benefit. Still, its importance cannot be undermined at all. Having a personal accident insurance policy makes sure that you can get your family some financial coverage in case you die in an accident.

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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