Can I Change Nominees Under My Term Insurance Policy?
Updated On Dec 01, 2021
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A nominee is a person named by a policyholder to receive a term insurance policy's death benefit if the insured passes away. The policyholder endorses the nominee or beneficiary name on the proposal form during the purchase of a term policy. A nominee, in most cases, must be someone the policyholder fully trusts to handle the claim money and put it to good use for the insured's family's financial well-being in the event of the policyholder's death. As a result, selecting a nominee who can be completely trusted requires extreme caution. Any immediate family members who can take care of the family's financial needs, such as a spouse, children, parents, or a close relative, should be nominated.
How Can Nominees Be Changed in Term Insurance?
Knowing that we can change the nominee in term insurance is important because common errors can occur during the policy nomination process. The policyholder may find himself in a situation where the nominee would have expired before he did, or where the current nominee has lost faith in him, necessitating a change of nominee name by appointing a new nominee. A term policy's nominee can be changed an unlimited number of times (for certain insurers). It's easy to change the nominee name on a term policy. Here's a step-by-step guide to changing the nominee on a term insurance policy:
The policyholder must fill out a change of nomination form from the insurer, which is available online or in person.
To update the nominee information, the insurer must receive a completed nomination form as well as a copy of the policy document. The policyholder must persuade the insurer that he or she has a relationship with the new nominee.
The policyholder must obtain an acknowledgement from the insurance company for the change of nominee name in order to avoid any future discrepancies during the claim settlement process.
Time Frame For Making Changes To Nomination
Before your policy matures, you can make a new nomination or change your nominee at any time.
Process to Change Nominee for your Term Insurance Policy
Following these three simple steps will allow you to change the nominee on your term insurance policy:
The policyholder must complete the change of nomination form, which is available online or in person from the insurance provider. • The completed nomination form must be submitted to the insurance provider in order for the new nominee information to be updated. The policyholder is responsible for informing the insurer about his or her relationship with the new nominee he or she wishes to appoint.
To avoid any future discrepancies during the claim settlement process, the policyholder must receive a written acknowledgement from the insurance company for the nominee name modification.
Term insurance plans, like all other types of life insurance, allow you to change your nominee. When appointing a new nominee in your term insurance plan, be careful not to make any of the following mistakes.
An endorsement, as well as a will, can cancel or change a nomination. However, the insurance company should be notified of the cancellation or change.
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.