Everything you need to know about Insurance Nomineeadmin
Having an insurance policy for our loved ones is important for ensuring a better future. In case of if anything unfortunate happens with you, the dear ones receive the amount from the insurer. Here the ‘Dear one’ known as the nominee of the policyholder. In order to keep the claim process hassle-free, you need to fill the nomination column carefully. Here is everything you need to know about Insurance Nominee. It will help you realize the importance that why proper nomination requires?
Whom to Nominate?
It is the decision of the Policyholder whom he wants to select his/her nominee for the insurance policy. The chosen one could be his/her life partner, kids, relatives or companions. Enlistment of the unknown individual is usually not approved by the insurers since it quite often increases their risk.
As well as the policyholder has to submit the following information regarding the nominee; such as Full Name, Address, and age same as his/her official documents, Relationship with the nominee etc.
The Insurer can even pick multiple other nominees wherein the sum assured is divided among all the nominees. If the nominee is minor, the policyholder needs to provide an appointee with him/her.
Changes in Nominee Name:
There are provisions in the Insurance policy that you can change the nominee during the policy term. The policyholder has to fill a form mentioning the new name of the nominee along with valid documents of proof. The insured also required to present the last nomination when making the changes. The current nominee supersedes all the old ones.
The policyholder can change the nominee any number of times during the policy term. In normal cases, changes in nomination done when the nominee dies before the policyholder.
What if One Makes No Nominations in the Policy:
In case your policy fails to have a nominee, you need not to worry, as the sum assured will be discharged according to the following rules –
The insurance company might dispatch the claim amount to Class I legal heir which includes- insured’s spouse, son, daughter, and mother.
In the case of a Will, the process is followed according to the Indian Succession Act, 1925 where the claim amount is distributed according to what has been stated in the Will. A succession certificate from the court will be required, to have a clarification on whom to handover the claim amount.
Whenever there is more than one legal heir, insurer intents are to safeguard their interest in scenarios of dispute on settlement of the claim. For this, the insurer shall ask for an indemnity bond, joint discharge statement, and waiver of legal evidence.
Common Nomination Mistakes:
Here are a few common mistakes people make while appointing a nominee on their insurance policy.
Not informing the nominee – This is the first and most common mistake done by a policyholder. The policyholder forgets to inform the nominee about his/ her nomination and about the policy documents. Generally it is required to inform the nominee; otherwise, this will deprive them of the financial support they will get in case of any misfortunate happen to the policyholder.
Not Filling nominee details completely – This is the second most committed mistake by the policyholder of not updating the nominee details. In this case, you left your loved ones with no backup. It is a provision in the policy that the policyholder can change the nominee name any number of times by filling the required form.
Appointing Just One Nominee –
Appointing a minor nominee without appointee – There are certain cases where we need to choose a minor for the nomination. Then it is advisable to appoint an appointee (for the minor) along with his/her name, address, relationship and other required documents of proof etc. The appointee will be in charge of the nominee until he/she turns 18.
Generally, when we fill the details in the nomination form, we mention just one nominee even after having numerous names in mind. It is required to mention multiple names if any unfortunate happen to the nominee before the insured one.
Having Wrong assumptions About Nominee Rights:
There is an assumption among general people that a nominee has supreme rights. But this is not valid. In the case when a policyholder wants to give total rights to his/her nominee. He needs to prepare a Will and mention the beneficiaries thereof. It’s better to be careful in advance to assure the financial protection of your loved ones.