How to Change Nominee in Term Insurance?
Table of Contents
A term insurance policy nominee is the individual that the life insured appoints to claim the death benefit in the event of the life insured’s death. The name of the nominee or the beneficiary is declared by the policyholder at the time of term insurance policy purchase. The choice of the nominee must be taken after careful consideration as the nominee appointed should be trustworthy. The nominee must be reliable enough to take care of the received claim money and use it for the financial needs of the insured individual’s family. In most cases, people choose any of their immediate family members such as spouse, children, parents or a close relative who understands and can take care of the financial responsibilities of the family.
Did you know that you, as a policyholder can nominate more than one person? Moreover, the same can be done by allocating a specific percent of the sum assured between various nominees? It must also be noted that if a policyholder does not appoint the nominee at the time of term insurance policy purchase, they can do so later by informing the insurer in writing. Want to know how you can change the nominee? Read along!
How to Change Nominee in Term Insurance?
A policyholder may find themselves stuck in a few situations. There may be a situation where the nominee would have expired before the policyholder did. Also, there can be a case of loss of belief in the current nominee. Needless to say, it could be anything that may urge the policyholder to change the nominee.
The first thing to note is that there is no limit to the number of times for a term insurance nominee change (depends on insurer).
The process for changing a term insurance nominee is simple and can be explained in steps such as:
Step 1
The policyholder must duly fill the change of nomination form, either online or offline.
Must read: Understanding The Role Of A Nominee In Life Insurance
Step 2
The policyholder must provide the fully filled nomination form with a copy of the policy document to the insurer for the desired nominee update. Convincing the insurance company of the relationship between the new nominee and the policyholder is a liability of the policyholder.
Step 3
The policyholder must get an acknowledgement from the insurer concerning the nominee name change. This must be done to prevent any discrepancy during the claim settlement process later.
It is advisable to policyholders to appoint more than one nominee with their absolute rights over policy benefits that they have also included in the will prepared. This is highly recommended so as to avoid any rifts between the family members over the entitlement of term insurance policy benefits.
Conclusion
To help your family receive the death benefit and lead a peaceful life, you as a policyholder, must appoint more than one nominee. If you have to appoint a minor nominee, make sure you appoint a custodian as well. Always provide complete nominee information and inform the nominee about the policy details. Lastly, inform the nominee of their rights.
Also read
Who Should Be Your Nominee For Your Term Insurance?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
