Who is a nominee and how does the process of nomination work in case of Life Insurance?
Q1. What is nomination? And who is a nominee?
Nomination is a right conferred on the life insurance policyholder to appoint a person or persons to receive the policy monies in the event of the policy becoming a claim by death. Any policyholder, who is a major and the life insured under a policy, can make a nomination.
A nominee is the person designated by the policyholder to receive the proceeds of an insurance policy, upon the death of the insured.
Q2. Can I change my nomination?
Yes. You can change your nomination at any time till the maturity date. All you need to do is to inform us about the change through the specified form.
Q3. What details am I to provide about the nominee/s?
The following details are necessary when filling in the proposal form: full name of the nominee, address, age, and the relationship between you and the nominee.
Q4. What is the difference between nomination and assignment?
While nomination is an authorization to receive the policy monies in the event of death of the life assured, it does not give the nominee an absolute right over the money received to the exclusion of other legal heirs. Further, the nomination can be revoked or cancelled at any time during the lifetime of the policyholder at his will and pleasure or by a subsequent assignment.
On the other hand, assignment of an insurance policy, such as a term insurance plan is a transfer or assignment of all rights and liabilities of the insurance policy in favor of the assignee.