All About Choosing a Life Insurance Beneficiary & Nominee
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the security of your income continuing thru your life and in your absence throughout your spouse's lifetime!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability.

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Back

Choosing a Life Insurance Beneficiary

Term Insurance Quote
  • 19th Nov 2019
  • 2,825

Choosing a Life Insurance Beneficiary

A life insurance policy provides financial aid to the heirs of a policyholder in case of his or her untimely demise. However, the heirs have to be assigned by the policyholder so that there is no confusion. The designated heir is known as a life policy beneficiary or nominee. The beneficiary can be any person whom the policyholder trusts. As a policyholder, you have the option to change the nominated person at any point if required. However, if your beneficiary is a minor, you need to assign a custodian. The minor can receive the benefits after turning 18 years old. Make sure to provide your beneficiary with copies of the life policy so he or she can claim the death benefit when required.

Choosing the beneficiary

There are no rules regarding whom you can choose as your beneficiary. It can be any person from your family, friends, or someone you know from work. However, the insurance companies prefer that your beneficiary is from the immediate family. Otherwise, a legal dispute can take place between the policyholder’s family and the nominee. However, there is a legal way to avoid such a possibility. If you decide to make a friend or anyone who is not your family member as a beneficiary, you can simply make that individual an heir in your will.

The concept of a beneficial nominee was introduced by the Government of India in 2015 to make sure that the legal successors of a policyholder cannot claim the death benefit unless they are assigned as the beneficiaries in the life insurance policy.

What happens when the policy does not have a beneficiary?

If you do not assign a life insurance beneficiary or if the beneficiary passes away during the policy term, and the policy is not updated accordingly, the insurer follows certain mandates as per the situation.

If you have not made a will that assigns someone as your beneficiary, the death benefit is given to your immediate heirs. Only your spouse, children, and parents are considered in such a scenario.

If you do have a will, the Indian Succession Act, 1925 is followed by the insurers. The sum assured is distributed according to the will. However, the court needs to issue a succession certificate. Also, the beneficiaries will need to provide an indemnity or waiver of legal proof to the insurer.

How to assign a life insurance beneficiary

To assign an insurance beneficiary, you need to provide their details when applying for a life policy. Once your application is accepted, the nominee will be considered as the legal beneficiary. You can also add or update the beneficiary later. To do so, you can collect the appropriate form from the insurer’s office or website. You need to sign a policy bond to complete the process when a witness is present.

You can change the beneficiary numerous times as per your requirements. However, you need to make sure that the previous and new beneficiaries are aware of the nomination so that there is no confusion in the future. You must make sure that the benefits of your life insurance do not fall into the wrong hands.Hence, you must think thoroughly before assigning a beneficiary.

- A Consumer Education Initiative series by Kotak Life

Also read

  • Choose the Nominee of a Term Life Insurance Plan Wisely

    You need to add a nominee in your term life insurance plan. The nominee will receive the sum assured if something untoward happens to you. Click here ...

    Read more
  • A Term Insurance Guide for Disabled People

    A term insurance policy should be an important part of your investment portfolio as it is the most affordable plan to secure the financial wellbeing o...

    Read more
    • 10th Nov 2021
    • 361

    Do Life Insurance Premiums Increase Every Year?

    life insurances are susceptible to annual premium increases because of external and internal variables, but there is a reason why premium increases an...

    Read more

Related Plans

  • Kotak Premier Life Plan

    Kotak Premier Life Plan

    Kotak Premier Life Plan is a limited premium paying participating whole life plan, where you can choose to receive bonus payouts even after premium pa...

    Know more
  • Kotak SmartLife Plan

    Kotak SmartLife Plan

    A Limited Pay Non-Linked Participating Life Insurance plan. You earn and work hard to accomplish your dreams and aspirations at every stage of life.

    Know more