Can you remove dependents from health insurance?

No matter how focused you are on your life goals or how sorted you are with your plans, the twists and turns always bring unexpected circumstances you simply cannot foresee. The best way to deal with such situations is to keep yourself and your financial investments flexible enough for possible adjustments. One such way to do so is to have the option to drop a dependent from your health care plan. Though you save a lot when you include health insurance coverage for dependents, the flexibility to remove them under unforeseen circumstances might bring relief in future.

Reasons for removal of dependents from Medical Insurance for Veterans and Families

Some of the reasons for removing a dependent from a medical insurance policy are as follows:

1. Child Attaining the Age of 25 Years

A dependent child can only be covered in a parent's health policy till they are 24 years old. You need to inform your employer if he is covered under a group mediclaim policy or your insurance provider if he is under a floater plan.

2. Legal Separation and Separate Coverage

Life does stop when you and your partner separate. But you do need to modify your health cover to separate your finances. You must inform your provider of the situation so your spouse can be removed from the health insurance policy.

3. Death of a Dependent

On the occasion of the death of an insured policy member during hospitalisation, the other members can file a claim and request the provider to settle it.  If there is no hospitalisation, the proposer can inform the insurer to remove the deceased from the dependent list and refund the premium.

4. Voluntary Removal

The premium for any family floater plan covering aged parents is based on the age of the eldest member which increases the amount substantially. Also, in the case of group medical insurance, though coverage is provided with no medical check-up, the sum insured is insufficient to cover both your ailing parent's medical costs. Also, it completely depends on the whims and fancies of your employer and the contract he wishes to sign with the provider. If health insurance for dependent parents is included in your floater plan or group mediclaim, arrange to remove their names by informing the HR manager in your office or your insurance company. Invest in separate health coverage with better-suited benefits for the elderly's requirements. Hence, they should think deeply and assess their health conditions before adding their parents to health insurance.

Removing Spouse From List of Dependants in Health Insurance

This can be done during qualifying events, which are significant life changes that force you to think about existing coverage. Some of them are as follows:

1. Legal Separation/ Divorce / Remarriage

Being in the middle of a legal procedure can create issues such as dropping your spouse's name from your health insurance. It may look ill-advised to the judge. However, during remarriage, it is necessary to relook and remove the ex-partner's name; otherwise, you will be legally penalised.

2. A Child’s Birth or Adoption

A birth or adoption of a child may cause extra financial stress if the child has post-natal complications. It is easier to include him as your dependent than to find a separate policy to invest in at that time. You may remove your spouse and add the child to enjoy maximum coverage in times of need.

3. Losing Employer’s Group Insurance

In case you have lost your job due to disability or any accident which caused restricted movements, it may be wise to remove your spouse from your health plan as you will need the maximum coverage to recover from the health condition. It may seem harsh, but if your medical expenses increase, it will, in turn, become a burden to your better half to manage alone. You may need to remove your partner from the group mediclaim as your employer might reduce the coverage.

• No matter what the reasons are, follow these steps to remove your spouse from the list of eligible dependents for health insurance:
• It is important to review your plan, benefits, and floater causes before the removal to check how it will ultimately reduce your burden.
• You need to notify your insurance provider or your employer if it is through your work.
• Valid reasons for such removal with documentary evidence will be provided to your insurer for proper processing.
• Inform your spouse about the changes so they can arrange a separate healthcare plan.
• Be sure to confirm changes and follow up with your provider till you get your changed policy documents with the new clause. 

Since you are the policy owner, you can certainly take steps to keep, add or remove anyone you choose to. Still, the benefits and advantages will entirely depend on the terms and conditions of your health plan and the unique situation under which you are taking the decision.

Removing Dependent Veterans from Health Insurance

With the exponential cost of health insurance for veterans and families, you might seem baffled as to why  insurance for dependents might not be a cheaper or adequate option for your ageing parents: 

1. Fewer  Options

Few insurers offer such plans, which involve your spouse, children, and elderly parents as the dependents on health insurance. Hence the options to choose policies with better and optimum coverage are restricted if you include your parents in the family floater. Remove them from your health plan and have separate plans, like Care Senior Citizen or Care Heart, based on specific requirements.

2. Benefits of No Claim Bonus (NCB)

Ageing brings with it a high probability of falling sick and more frequent hospitalisation. In such cases, you lose the chance to claim the add-on benefits of keeping your spouse and children healthy. The likelihood of receiving NCB becomes nil, and out of control in case you have elderly parents with pre-existing diseases.

3. Pre-existing Diseases

Your parents may likely be suffering from pre-existing diseases, which, in regular policies with a floater plan, have a waiting period of 2 to 4 years. However, with exclusive health plans for senior citizens, like Care Senior Citizen, you may just have to wait two years for some commonly named ailments, like cataracts, osteoarthritis, etc.

4. Additional Tax Benefit

Who doesn't like to save tax? Under section 80D of the Income Tax Act, you can get an additional tax deduction benefit if you have a separate health insurance for parents and family. The maximum allowable amount is 25000/- for parents below 60 years of age and 50000/- if they are above 60.

5. Reduction in Premium

In a family floater plan, the premium is decided based on the age of the eldest member on the dependent list. So, it might be practical not to include your parents to enjoy the maximum benefits of floater coverage.

It might seem harsh to drop your aged parents out of your family plan, but if you are pragmatic and responsible, you will realise it's best for your and your parents' healthy future.

In a Nutshell

The impact of the number of dependents on health insurance costs depends entirely on the health condition of the policyholder and the dependents. A family of six members may have fewer medical expenses than a family of three if the latter suffers from chronic disease or has some pre-existing diseases. It is true, though, that the premium increases with each addition to the dependent list. However, the added benefits like no claim and year-end bonuses can save you money even if you have a dependent list of more than two. Hence, it is prudent to consider all aspects before dropping out of insurance for dependents.

Disclaimers: All plan features, benefits, coverage, and claims underwriting are subject to policy terms and conditions. Kindly refer to the brochure, sales prospectus, and policy documents carefully.