Who Is A Nominee In A Life Insurance Plan?
Close

Buy a Life Insurance Plan in a few clicks

Close

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

Who Is A Nominee In A Life Insurance Plan?

Term Insurance Quote
  • 16th Nov 2021
  • 323

Who Is A Nominee In A Life Insurance Plan?

The primary goal of life insurance is to offer financial stability for your loved ones. Life insurance plans give out a predetermined sum assured amount to your family in the case of your tragic and untimely demise during the policy term. Therefore, choosing a suitable nominee for your insurance is critical whenever you decide to buy a life insurance policy.

Nominee Meaning in Insurance

A nominee or beneficiary is a person who is eligible to collect the death benefit from the insurance firm after the policyholder’s death. The primary policyholder chooses and appoints the nominee, and generally, it’s the spouse, parents, or children. It’s also not uncommon for a trustworthy individual from outside the family to be named the beneficiary.

Types and Life Insurance Nominees Rules

Although the insured can nominate anybody, there are specific regulations and rules to nominate and the kinds of groups who can be nominated.

Beneficial Nominee

Suppose a close immediate family member (such as a spouse, children, or parents) is designated as a nominee under the life insurance nominee rule. In that case, those individuals will become beneficial owners of the claim benefits straight away. Therefore, they will be referred to as “Beneficial Nominees.” This means that the death benefit will be paid to Beneficial Nominees and not to any other legal heirs, regardless of circumstances.

Minor Nominee

Can a minor be a nominee in life insurance policy? This is a common question in this context. As a rule of thumb, you nominate your child as a nominee. It is a wise and intelligent option since they can utilise the principal amount while you are gone. If the child is under 18, however, the lump sum payment may be too much for them to bear, and therefore, you must name a caretaker or an appointee to collect the death benefit on their behalf.

Nominees Outside Family

It is often wondered can a friend be a nominee in life insurance policy?

According to the present trend, policyholders are increasingly naming their friends or distant family members for death benefits. This sort of preference is known as the non-family nominee type.

Multiple Nominees

For your life insurance plans, you have the option of naming several nominees. You can also indicate the percentage of death benefits that each candidate will get. If no particular percentage is specified when registering the nominee, the insurance provider splits the guaranteed money evenly among the nominated candidates.

What Happens If a Nominee Dies in Term Insurance?

The nomination becomes void and ineffective if the nominee expires while the insured is still alive. However, the insured has the option to replace the nominee. If the nominee passes after the insured has died and before the death benefit amount is paid, the legal heirs pay the claim money.

You should understand that only buying a life insurance policy isn’t the end of your responsibilities! It’s equally critical to choose the right candidate to guarantee that your loved ones don’t miss out on opportunities that will secure their financial stability in the future.

- A Consumer Education Initiative series by Kotak Life

Also read

  • Why Term Insurance for Women is Important?

    With changing times, the role of women across the globe has changed. Women no longer play a strong role only in the household.

    Read more
  • Life Insurance and Millennials

    Importance of Life Insurance young people do not understand. Life insurance for millennials. As it’ll benefit you and your family’s future! Read h...

    Read more
    • 14th Dec 2021
    • 542

    Are Deaths Due To Coronavirus Covered by Kotak E-Term Plan?

    A term insurance plan with COVID-19 coverage helps policyholders protect their family members in case of their death. Read more to know about the K...

    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 Lifetime Income Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your ...

    Know more