Term insurance is a life insurance plan that provides a lump sum death benefit to your loved ones in your unexpected demise. The financial benefit should reach your family to help them contain the crisis and help them get over the situation comfortably. As a policyholder, you should be well-versed in the term insurance nominee rules to avoid discrepancies during the claim settlement process. Here is a detail about how you should change your nominee in the term plan.
Before we learn how to change the nominee, let us understand who is a nominee in the term insurance plan.
Who is a Nominee in a Term Plan?
Term insurance nominee is the person from your family whom you nominate for receiving the lump sum death benefit on your unexpected demise. The nominee details are provided during the policy inception to simplify and ease the process of claim settlement.
How to Change the Term Plan Nominee?
There are possible scenarios wherein your nominee may not survive the policy term, or you have a change of thought to ascertain the benefit to another family member. In such cases, you can change the life insurance nominee.
Here are the necessary steps that you need to follow:
- Visit the insurer’s official website or go to the nearest branch office and get the form for changing the nomination.
- Fill out the necessary details regarding the new term plan nominee accurately, submit it, and ensure it reaches the insurer.
- As you approach the insurer to change the nominee, you are also liable to convince them regarding the relationship between you and your new nominee to process the change in nomination.
- On successful application processing, your insurance provider will change the nominee details. Get an acknowledgement from them regarding the same to avoid any disputes in the future.
You can also provide multiple nominees to your term insurance if you want to split the benefits among your family members. In addition, you can provide the percentage of benefits to be provided by the insurer to every nominee for a smooth claim process.
Choosing an insurer based on simplified procedures will reduce the time, effort, and cost. For instance, Tata AIA term life insurance provides simple online processes for many requirements. In addition, it details the processes online while ensuring consistent customer executive support for answering queries.
Why is a Nominee Change if Required Important?
Having realised how to change the nominee, it is also important to understand why it is important to do the same.
When you have decided to change the nominee, you need to initiate the process because:
- It avoids the confusion on whom to give the lump sum death benefit.
- It will not complicate the process by the need to find the legal heir in case the actual nominee is no more.
- If there is confusion regarding the nominee, many family members will come forward claiming the death benefit. It will turn into a legal battle that might take years to settle down.
Therefore, if you want the death benefit to reach the rightful owners, you should mention the same on the term insurance application and process the change if it is required.
Conclusion
Term insurance plan and its objective of providing financial security to your loved ones should never go in vain. Therefore, you need to provide the exact details during policy inception for a smooth claim settlement process. However, if you feel that the nominee has to be changed for some valid reason, you can do the same through the application form for changing the nomination. It is a simple process that will ascertain the benefits to the rightful owners of the death benefit without any legal dispute.
