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How to add, change or remove a beneficiary from a health insurance policy

Beneficiaries may be changed for a health insurance policy in the same manner as a life insurance policy.

by Tony Novak, CPA, MBA, MT, NAHU certified consumer driven health care consultant,10/31/2011

An insurance beneficiary is the person who is paid the proceeds of an insurance claim. In many cases the beneficiary is the same as the policy owner. But when the policy owner dies before a claim is settled the settlement proceeds are paid to the person(s) named as a beneficiary for the policy? We tend to focus on the role of beneficiaries for a life insurance policy. Few people think about beneficiaries for health insurance policies. Yet since a large portion of our medical expenses accrue in the months before death, the issue is often important. Additionally, many of today's hybrid insurance policies, especially group insurance, includes both health benefits and a death benefit. The initial policy beneficiary is named in the application for insurance. Perhaps you skipped that non-essential section of the application or don't remember it. Or perhaps your health plan always assumes that the estate of the policyholder is the beneficiary. Yet every health insurance policy has one or more beneficiaries.

The beneficiary should not be confused with the assignee. An assignee is a doctor, hospital or health facility that you have authorized to be paid directly for specific medical bills. The beneficiary, in contrast, is entitled to all of the insurance benefit payments not otherwise due to an assignee.

To add, change or remove a beneficiary for your insurance policy simply notify the insurance company by snail mail letter with a manual signature (Email usually will not work for this purpose). This is called a "letter of instruction" as serves as a legal notification that you are exercising your policy rights. Rarely a health insurance company will request that the change be recorded on their own policy change form although this practice is widely used by life insurance companies. If necessary, the insurance company will provide the appropriate form. After your beneficiary request is recorded, the insurance company will respond with a written confirmation that the policy change has been completed.

Usually a parent, child or spouse is named as the beneficiary of a health insurance policy. In the event of death of the policy owner and an absence of a named beneficiary in the insurance application, the insurance company pays the estate of the policy owner.


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This web site is independently owned and managed by Tony Novak operating under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator". Opinions expressed are the sole responsibility of the author and do not represent the opinion of any other person, company or entity mentioned. Tony Novak is not an agent, broker, producer or navigator for any federal or state health insurance exchange but may provide uncompensated advice, reviews and referrals to these official resources. Novak is compensated as an accountant, adviser, affiliate consultant, marketer, reviewer, endorser, producer, lead generator or referrer to some of the other commercial companies listed on this site. Information is from sources believed to be reliable but cannot be guaranteed.