Term insurance is one of the forms of investment that you can trust to protect your family if untimely death should bring about a tragic situation. Term insurance will enable your family to fend for themselves even if you are not around and their needs will be fulfilled through the lump sum. The beneficiary or nominee can easily claim the policy to receive the sum assured as a lump sum or monthly income.Read more
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A nominee is a person you can select to receive the death benefit of your term insurance policy. It can be any person of your choice or who is financially dependent on you like family members. The individual can be anyone such as your partner, child, or parent.
You must provide the details of your nominee at the time of purchasing the policy so that the company knows whom to contact in the event of your demise. If you are unable to decide the nominee while buying the policy, you can always choose someone at a later date and inform your insurer of your decision. It must be noted that you can also opt for more than one nominee to distribute the sum assured or life cover.
Some advantages of nominating a person for a term insurance policy are:
Term insurance is a long term investment. There are several reasons you may find yourself in a position where you wish to switch your nominee. For example, the unexpected death of the nominee before you, change in your relationship or loss of trust. In such a situation, a thorough knowledge of the procedure required to change the nominee is essential.
Listed below is the stepwise process to ensure a successful switch of your nominees:
It is always advised to keep your immediate family members updated with all information regarding all the policies that you have purchased and any changes that you make to them. If you decide to change the nominee of your term insurance policy, you can also update the same information in your will to avoid confusion.
Note: Will of a person and term insurance are two separate policies/documents.
Changing a nominee in a term insurance policy is not a complicated procedure, as assumed by many. You must not hesitate to do so if you feel the need for it.
Lapses in decision-making can cost policyholders and their families dearly in the long run. Here is a list of a few mistakes that are commonly observed during the nomination process:
The process of being able to provide for your family and loved ones even after your passing is a privilege. You can be assured that they will be well looked after and have something to fall back on. You must carefully purchase a term insurance policy and appoint a nominee to avoid misappropriation of your funds in your absence. However, all insurers advise extreme caution while selecting a nominee.
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