Investing in a term insurance plan to secure your family’s financial future is one of the best financial decisions of your life. If you are not around due to any untoward incident, the sum assured can help your family members meet their aspirations and financial needs. Therefore, you need to select the most suitable term plan.
One of the best ways to compare the features and benefits of various plans is by using a term plan calculator. Doing this makes your task easier and helps you to invest your hard-earned money in the best available plan.
As you know that the insurer will hand over the sum assured to your nominee, it is vital to select a beneficiary of the policy. While applying for a life insurance term plan, it is mandatory to enlist the name of the nominee. Let us look at the process and importance of hiring a nominee.
How to enlist a beneficiary
While applying for an offline or online term insurance plan, it is compulsory to list the nominee’s details without which you can proceed ahead.
Who can you select as your nominee?
The nominee can either be your parents, spouse, brother, sister, daughter, son, or any relative like an uncle, aunt, niece, or nephew.
Why is it necessary to enlist a nominee?
It is essential to list the nominee’s name and provide all the necessary documents required by the insurer because you are authorizing the person to collect the sum assured when you are not around. Therefore, you need to choose a trustworthy and responsible person who can take care of your family in your absence.
Is it possible to select multiple nominees?
Yes, it is possible to choose multiple nominees. You can appoint numerous beneficiaries to whom the sum assured should be allocated. You can divide the money among nominees; they will receive the funds based on the sharing ratio that you had decided while applying for the term plan. If the nominee is a minor until the policyholder’s death, then the insurer will give the sum assured to the appointee.
In such a case, you have to enlist the appointee’s name and details while applying for the term insurance plan. In case the chosen nominee is no more, you must change the nominee’s details and enlist a new name.
What if there is no nominee?
For instance, if the nominee has passed away or the policyholder cannot furnish the required details of that person, or if both the policyholder and nominee are dead and the insurer is not updated, the Class I legal heir will receive the sum assured, which can be the policyholder’s son, spouse, daughter, father, or mother.
Details of the nominee required by the insurer
You will have to provide the insurer with information, like:
- Name
- Age
- Address
- Relationship with the nominee
Additionally, you will have to submit necessary documents, like Aadhaar Card and PAN Card, among others to the insurer.
It does not matter whether you are buying an offline or online term insurance plan. However, it is of utmost importance to select a plan that offers adequate coverage to your dear ones during your absence. Here is when a term plan calculator can prove handy, as it helps to determine what should be the ideal sum assured keeping various factors, like your family’s monetary requirements and life goals in mind.
However, apart from doing this, you need to ensure that the right person receives the money in case of an unfortunate incident. Therefore, it is your responsibility to appoint a reliable person as a nominee who will receive the funds in your absence.
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