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Death of Insured in Floater Health Policy - Renewal
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12 Oct, 2020
by Ashutosh Chokhani
In floter health policy, on death of an insured member. At the time of next renewal, will the full sum insured be renewed as it is? Or be divided on the basis of number of members remaining?Ex : 50L Floater covering husband and wife. Husband dies. On next renewal, policy renew for 50L or 25L? Thanking You, in advance
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13 Oct, 2020
We breathe insurance :)
Yes, the sum insured will be renewed as it is. Insurer cannot reduce your sum insured, due to death of one of the insured members in a family floater. In your example Policy can be renewed with full cover upto 50L - in an individual plan - Insurer cannot forcefully reduce the cover since the number of members have reduced.
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Hey Ashutosh,
Two things are pertinent to note.
1) If the insurance plan has a mandatory requirement to have min. 2 family members to be covered, and in the event only 2 members were covered and one dies, then renewal cannot be made in the same product. Then the surviving member has to be shifted to another plan from same insurer that allows individual only.
When that happens, as per your example, the surviving member has the choice to renew in new plan at 50L. Only if surviving member doesn't want that much cover, then they can opt to reduce sum insured (SI).
2) Even if the plan allows surviving member(s) to continue the plan upon death of one of the members, they're free to continue 50L or can opt for lower cover basis their need.
Hope this is clear. Happy to answer if you have followup question.
If you can mention the exact name of the plan, then I can advice more accurately.
Anuj Jindal
Co-founder
SureClaim