When buying insurance, don’t take nominations lightly

What is the importance of nominee in a health insurance policy? I have bought individual health plans for myself, my wife, and two children. I have nominated my wife. Is that okay or should I nominate somebody else other than the four of us?
— Ashish
Nomination is important as the nominated person receives the proceeds of any claim on the death of the insured person.

For example if a policy is proposed by Person A for himself, his spouse and child one and child two and say the spouse dies while hospitalised, then any claim in respect of that hospitalisation is paid to the proposer (Person A). If Person A dies during a hospitalisation and a claim is payable, it will be paid to the nominee (say the spouse in this case if she is the nominee named in
the policy).

If you are the proposer for all the individual policies, then you need to worry about the nomination on your own individual mediclaim policy.

You should treat the nomination process in the same way as you would in respect of any other financial assets (such as demat accounts, bank accounts, etc) owned by you.

If you have nominated your spouse in respect of such other financial assets then the same practice can continue for your mediclaim policy as well.
In case each of the individual policyholders are proposers for their own policies, then their respective owner should treat the nomination process in the same way as they would in respect of any other financial assets owned by them.

If they have nominated your spouse in other financial assets, then the same practice can continue for the mediclaim policies as well.  Your spouse can similarly follow the practice that she follows for other financial assets owned by her.

My date of birth is February 3, 1983. I need travel insurance along my spouse (DoB: November 12, 1984). I want to insure my travel against death (I already have medical facility as I am a government employee). Travel will be from 20:15 hours on December 30, 2010 to 08:00 hours on December 31, 2010. I want maximum possible insurance.
    — Sanjay Kumar Chhabda
If your sole aim is to ensure payment of the insurance amount to your heirs in case of an unfortunate death during the foreign tour, you can take a regular accident policy (which covers death from accident occurring anywhere in the world) or a regular term policy (which covers death from any cause occurring anywhere in the world).

Unfortunately neither of them would be available for a few days and you will need to pay at least a year’s premium in the case of accident policy and at least a quarter’s premium for an online term insurance policy.

A regular travel policy will also provide this facility, but you will also need to buy the base policy that covers medical expenses, if any, incurred while on travel. That is likely to be the most cost-effective, if the sole aim is to cover death during the foreign tour notwithstanding that you get coverage for medical expenses as well (that you don’t need, since the government picks up your medical expenses as per information provided by you on email).

The writer is CEO, Apna Paisa, a price & features comparison engine for loans, insurance and investments. He can be reached at hrdna@apnapaisa.com