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Who Is Eligible To Receive Life Insurance Claim Benefit?

Published On Jun 10, 2021 5:45 PM By Shrida Gulati

The most common question asked after purchasing a life insurance policy is ‘Who will receive the claim benefits?’. If the policyholder/insured passes away in any case during the policy tenure the insurance company provides the claim benefits to the Nominee of the life insurance policy. Let’s understand Who a Nominee is.

Who is a Nominee/Beneficiary in a Life Insurance Policy?

Nominee/Beneficiary is the person who receives the sum assured or any type of other benefits of the life assured in case of an unforeseen event. The policyholder is entitled to make a nomination any time during the policy tenure for payments of benefits under the policy at the time of unforseen demise of the life assured. Nomination can be made by endorsement on the policy or by giving in written to the insurance company. Nomination is permitted under section 39 of Insurance Act, 1938. 

Generally people choose to appoint their spouse, children or immediate family members as nominees but there are 4 different types of Nominees. Following discussed are the different types of nominee in the life insurance:

All About Minor Nominees

If the life assured makes his/her child who is younger than 18 years of age, they do not qualify the eligibility to handle the claim benefit and are considered as Minor Nominees. The life assured then assigns a custodian known as Appointee. In case the policyholder/insured passes away during the policy tenure and the nominee is still a minor then the claim benefit is provided to the appointee as the person who has custody of the claim benefit till the nominee turns major.

Who Are Beneficial Nominees?

If the life assured makes any immediate family member such as parents, children or spouse they will be considered as the beneficial owner of the claim benefits of the life insurance policy. If the immediate family member of life assured is appointed as Beneficial Nominee as per the new set of laws. This leads to the claim benefits payout to the Beneficial Nominee only, the claim benefit will not be paid to any legal heir.

Can I Change My Life Insurance Nominees?

The life assured can change the nominee whenever he/she wishes to, they must make sure whom they choose as the nominee. Always remember the current nominee will always have an upper hand than the previous one.

Can Non-Family Members Be Nominees?

If the life assured appoints distant relatives or friends as a nominee in their life insurance policy they are called Non-Family Nominees. In such scenarios where the life assured is appointing a non-family nominee, the life insurance company can refuse the nomination.

What Happens if the Nominee Passes Away Before Life Assured?

  • If the nominee passes away prior to the demise of the policyholder/insured and policyholder/insured also passes away then the claim benefit will be provided to the legal heirs/representatives.
  • If the nominee passes away prior to the demise of the policyholder/insured and the policyholder/insured survives till the maturity then all the benefits payable will be provided to the policyholder/insured.


The nomination of the nominee lets the life insurance company know that the sum  assured money is going to be paid to the person entitled under the policy. Nomination is mandatory and very important some time we overlook it. It is very important to make a proper nomination, because it enables the life insurance company to settle claim hassle freely and quicker. It is advised to always nominate an immediate family member, spouse, parents or children to avoid any disputes between the legal heirs and the nominees. 

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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.

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