How To Change Nominees in Term Life Insurance Plans?

A term life insurance protects an individual financially. Most people think insurance plans are meant for family people only. But this thought is attributed only because after getting married, you need financial support. Marriage is indeed a responsibility in the form of spouse and children but there are enough reasons that an unmarried single woman and man should also buy a Term Life Insurance plan. The policy remains affordable and offers protection for a predetermined time. You have a wide range of options when it comes to the term life insurance. The cover can last for a minimum of one year, with an annual renewable term life benefit. Term Life Insurance Policies come in 10, 15, 20 and 30-year terms. You need to mainly consider three things when you are buying a Term Life Insurance – coverage, term and company. As long as you pay the premium, you’re covered in the policy.

The policy will safeguard you and your loved ones if something happens to you, for which there is a nominee option. A lump-sum amount is the predetermined amount on your policy that is handed over to your nominee as mentioned on the policy proposal form. You need to include a nominee without fail if you buy a Term Life Insurance Plan with a death benefit.

You will need to include the details of the nominee which can be either your family member like mother, father, spouse, son, daughter, or any distant relative. By appointing a nominee on your Term Life Insurance Plan, you make the person responsible for claiming all the sum assured upon death. Therefore, you should choose a responsible person to be your nominee who can take responsibility in your absence. Read the post to know how to choose a nominee on a Term Insurance plan wisely.

Benefits of Having a Nominee on Term Insurance Plans

A nominee is appointed by a policyholder who can be anyone the policyholder wants. The nominee, upon the death of the policyholder during the policy, can get the sum assured. As per Section 39 of the Insurance Act 1938, the policyholder of a term life insurance policy may nominate a person or persons to whom the money is to be paid in the event of death. You can add a nominee from the time of policy inception or at any time before it matures.

Any immediate family member like spouse, children or parents can be the nominee. This means that, after the death of the policyholder, the benefit will be provided to the nominees and not to any other legal heir. To prevent any dispute during the policy claim, policyholders are advised to nominate their immediate family members as nominees.

How to Change Nominees in Term Life Insurance Plans?

There are common errors that can occur in the nomination process of the policy. You might face a situation where your nominee would have expired before, or you lose hope in your current nominee, prompting you to appoint a new nominee. The process to change the nominee name in a Term Life Insurance Policy is a simple one. Follow the steps below to do so.

1. Change the nominee in the nomination form either online or offline
2. Submit the nomination form along with a copy of the policy document with updated  nominee details
3. Obtain an acknowledgment from the insurance company for the change of nominee name to avoid any discrepancy
4. It is safe to have more than one nominee

Multiple Nominees

There can be multiple nominees as per your decision. The sum assured can be shared among the nominees as per the percentage chosen by you. If any nominee dies during the policy term, it’s your responsibility to update the nominee, otherwise, your legal heir can claim the sum assured.

Change in the Term Life Insurance Nominee After Marriage

When a single individual buys a Term Life Insurance policy, there are chances of changes in the nominee. At first, the individual prefers their parents as the nominee for the Term Life Insurance plan. But later after marriage, the responsibility increases and the policyholder might think of changing the nominee. It could also happen in the case when the first nominee which the policyholder has appointed dies during the policy term.

You can update the nominee on your Term Life Insurance by adding a spouse, or children if the child is below 18 years. You need to provide an appointee to receive the policy sum assured in case of death of the policyholder during the period when the nominee is a minor. The appointee should be an adult person.

Top Life Insurance Company Sum Assured Amount

If you want to buy a Term Life Insurance Plan, look at the below mentioned insurance companies and know what is the maximum sum assured and policy term they have for you.