my offers

How about checking some pre-approved offers you might be eligible for?

my offers

How about checking some pre-approved offers you might be eligible for?

  • Mobile No.
  • Date of birth

You have a pre approved offer

  • Sum Assured
    Premium
    Persons Covered
  • Rate
    5%

Currently, we do not have a personalized offer for you but don’t be disheartened. Check out our oven fresh deals of the day here!

We have 02 personalised offers for you

Currently, we do not have a personalized offer for you but don’t be disheartened. Check out our oven fresh deals of the day here!

my offers

Financial security for your family comes with tax savings for you! ✓Buy a Term Plan & save up to ₹46,800* on tax | ✓₹1 Cr. Life Cover at just ₹23*/day!

What is a Nominee and Who Should be Your Nominee?

One of the best ways to secure the financial future of your loved ones is by getting a term insurance plan. A term plan is the most feasible life insurance product that offers a lump sum benefit to your dependents after your unfortunate death.

 

You decide the amount received by your beneficiaries when purchasing the policy. Therefore, it is mandatory to enlist nominee(s) in your term insurance application. Let's discuss everything you need to know about term insurance nominee(s).

What is a Nominee?

A nominee is an individual authorised by the insured to receive the policy benefits in the event of a death claim. To put it simply, if anything were to happen to the term insurance policyholder, the insurer will proceed to pay the death benefit to the nominee. Typically, you can appoint one or more people as nominees in your term insurance plan.

Who can be the Nominee?

Ideally, it is observed that most people enlist their partner, children, and/or parents as the nominee.

 

Previously, there was no clarity on the status of nominees. The legal heirs were usually eligible to claim life insurance plans. Hence, to ensure that the death benefit goes to the right recipient, the concept of a beneficial nominee was introduced.

Importance of the Nominee

When buying a life insurance product, such as a term plan, it is necessary to enlist and provide details on the nominee as well. The individual you appoint as the nominee can be a family member or your close friend. The purpose of having a nominee will ensure that the benefits of the term policy are directed towards the individual you trust the most to take care of your family and finances after your death.

Different Types of Nominees

There are three types of nominees that you can enlist under your term insurance plan:

 

  1. Beneficial nominees

  2. Minor nominees

  3. Non-family nominees

Now, let’s understand these types of nominees in detail.

Beneficial Nominees

Beneficial nominees are the individuals who are your immediate family members, such as your spouse, children, or parents. So, in case of your untimely death during the policy tenor, the death benefits will be paid to the beneficial nominees and not to any other legal heirs. Make sure that you enlist all your immediate family members under the beneficial nominees to avoid future family disputes after your death.

Minor Nominees

It is quite usual for people to appoint their young children as beneficiaries of their term insurance plan. After all, the policy is purchased to secure their financial future in your absence. However, children below the age of 18 are deemed ineligible to manage the claim settlement received on the policy. Hence, you (the policyholder) also need to appoint a custodian.

Non-Family Nominees

Although the chances of appointing a stranger as the nominee of the life insurance policy are low, some people still do. These include individuals who are friends and distant relatives. If you enlist a close friend as the nominee, you need to fulfil the essential documentation for their successful inclusion under the term policy. You need to convey your plan correctly when choosing a distant relative or friend as your nominee here. Failing to establish this agenda will lead to the rejection of your term insurance application.

Benefits of Nomination Facility in Term Insurance

The benefits of enlisting nominees in your term insurance plan are as follows:

 

  • Appointing the nominee serves the purpose of the term insurance plan. In case of your death during the policy tenor, the beneficiaries will receive the death benefit.

  • You (the policyholder) have the liberty to nominate any individual under the nominee list. It can be your immediate family members, friends, or distant relatives.

  • You also get the liberty to nominate multiple people. After your death, the benefit amount will be shared among the enlisted individuals.

  • You can cancel or change the nominees any number of times.

Nominee Particulars

When enlisting the nominees under your term insurance plan, you have to submit the following details to the insurer:

 

  • Name of the nominee

  • Age of the nominee

  • Residential address of the nominee

  • Your relationship with the nominee

Along with the aforesaid details, you also need to submit supporting documents as proof to the insurer.

Multiple Nomination

You can appoint multiple people as the beneficiaries of your term insurance plan. However, the death benefits received will be shared equally among the listed people. You can also dedicate a percentage of the benefit amount to each individual as per your will.

Change in Nomination

Even after buying the term insurance plan, you can edit the nominee list. Simply obtain the nomination form from your insurer and fill it out. Then submit the necessary documents, and the said details will be updated under your policy in no time.

 

Moreover, you will receive a written acknowledgement from the insurer regarding the change in nomination to avoid future discrepancies. No limit has been set on how many times you can change the nominee list.

What if No Nomination is Found?

In case you do not have any nominee enlisted under your term insurance plan, the following rules will be applied when executing your term plan after your death. The insurer will pay the death benefits to the Class I legal heir. The following people qualify as Class I legal heirs:

 

  • Your spouse

  • Your son

  • Your father

  • Your mother

 

In case you have a legal will in place, the following process will be followed:

 

  • The insurance plan will be processed as per the Indian Succession Act of 1925.

  • The insurance amount will be distributed as per the will agreement.

  • The court will issue a succession certificate. The insurance payout will be distributed among the surviving dependents as per the court's decision.

Nomination Oversight

When enlisting the nominee, make sure you avoid making the following mistakes as it can cause trouble when claiming in future:

 

  • Ensure that the nominees you enlist are informed about the nomination before sharing their details with your insurer. In case the nominee is unaware of his/her right to make a claim on your term insurance plan, nobody will benefit from the said investment.

  • Review the details of the nominee properly when submitting the nomination form. If your nominee dies before you (the policyholder), make changes to your plan immediately.

  • When appointing minors as your nominee, also enlist a custodian. Otherwise, the minor will not receive any financial benefit upon your death.

  • When buying term insurance, make sure that you authorise at least one person as your nominee.

Nomination vs Assignment

The nomination option gives the nominee the right to avail death benefit - which authorises the beneficiary to receive money as financial security. This right is provided by the policyholder.

 

Assignment, on the other hand, is the transfer of policy ownership. So, as a policyholder, you can pass on the rights of your policy to an assignee. However, you need to create a separate deed to do so. You must also note that the policy cannot be revoked once passed on.

Conclusion

Having the right person listed as the nominee will give you much-needed peace of mind when planning your family’s financial future. Besides this, you need to buy your term insurance plan from a reliable insurance provider. You can browse the term insurance plans available on Finserv MARKETS and benefit from extensive coverage, affordable plans, a high sum assured amount, quick claim settlements, and more.

FAQs on Nomination

  • ✔️What is the need of nomination in insurance?

    For life insurance, the policyholder needs to nominate one or more people who will be entitled to receive the sum assured after the policyholder’s demise.

  • ✔️Can I nominate anyone for my insurance policy?

    Yes. You can appoint anyone to avail the death benefit after your demise. You are entitled to nominate someone beyond your blood relation as well.

  • ✔️Can I change the nominee?

    Yes, you can change the nominee or make a fresh nomination any time before the insurance policy matures.

  • ✔️What is a minor nominee?

    A nominee who is below the age of 18 is a minor nominee.

  • ✔️How long after the policyholder’s death can you claim life insurance?

    There is no time limit to claim a death benefit.

Happy Customers of Finserv MARKETS

Getting a loan to take care of my wedding and relieving my parents to enjoy the occasion was the best decision I ever made. Easy-to-apply, amazing interest rate and quick disbursal, what more can one ask for!

I am passionate about the vehicle I drive. I want to protect it with the best available option. What amazed me was the full transparency, quick quotes and the attractive discount on the premium while choosing the annual payment option!

Check your personal loan eligibility in seconds!

My husband and I will finally move into our own house this Diwali. All thanks to Bajaj Finserv, with competitive interest rates, minimal processing fees and easy to repay EMIs, our dream saw the light of reality in no time!

Get the best FD interest rates starting @ 8.40%. Let's start!

Kids grow up fast and to fulfill their dream trip to Disneyland I had everything but instant funds. With no collateral or guarantor required and a hassle-free processing, I gifted my family a memorable trip to Orlando with just a click!

Get sum insured up to 1 Crore! Let's start!

The best way to start looking for health insurance is to do a close study of the coverage needs and checking the insurance company's claim ratio. No unnecessary jargons, easy to apply claims process and choice of premia!

Zero additional charge on part-payment option on Business loans! Let's start!

I bought my first iPhone using my Bajaj Finserv EMI Network Card. Zero downpayment with a No cost EMI on Bajaj Finserv EMI store just made my day!

Get home loan sanctioned online in 72 hours! Let's start!