Appointing A Nominee in Life Insurance policy

Intro: Safeguard the interests of your dependents by appointing a nominee to your policy.

A life insurance policy secures the financial interests of your dependents in case of an untimely demise. To ensure that the bereaved dependents can easily receive the death benefits, life insurance companies have made certain provisions. ‘Nomination’ is one such provision.

Understanding Nomination

As a life insurance policyholder, you have the right to make a ‘nomination’. This involves appointing a nominee. A nominee is the person designated to receive benefits under a life insurance policy in the event of death of the policyholder. The nominee thus performs the role of a ‘trustee’ for the legal heirs of the policyholder.

Benefit Of Nomination

By making a nomination, you safeguard the interests of your dependents. Even though in the absence of nomination, your legal heirs are entitled to the benefits receivable under a life insurance policy, they would have to undertake time-consuming hassles of submitting a succession certificate or a will in order seek their claim. Nomination removes this time-consuming process. With nomination, the heirs do not face such procedural difficulties, which could delay the receipt of their claim.

Undertaking a nominee

Though nomination can be undertaken any time during the policy term, ideally, it should be undertaken at the time of policy purchase. As a policyholder, you need to mention the full name, address and age of the nominee. You are also required to state your relationship with the nominee. Also, you have the right to make multiple or successive nominations and change nominations any number of times during the policy term.

Important Points To Note

• Inform your nominee about the nomination details and the whereabouts of the policy documents.
• Nominees do not have absolute rights. Your legal heirs can sue the nominee.
• The transfer or assignment of the policy automatically cancels the nomination.
• In case you have more than one heir, there could be a dispute on the percentage of benefits receivable by the different heirs. To avoid this, you should mention the entitlement of each heir in the nomination section of the policy.
• Your written will takes precedence over the nomination.

Life Insurance policy holder and Its duties

All rights are accompanied by certain duties and responsibilities, in this issue, we cover duties of a life insurance policyholder. Read on to know them…

1 Furnishing Full and Fair Information
As a policyholder, you are responsible to timely furnish all information sought by the insurer. The information so provided should be true and fair. This includes basic information (such as your age, address, etc.) as well as any other information which in the opinion of the insurer, could have a bearing on the risk to be covered (for e.g. a history of your past illnesses, etc.).  Furthermore, you are required to:
Keep the insurance company informed about changes in address and contact details.
Notify the insurance company in case of transfer or assignment of the policy.

2 Preserving Documentation
You are required to preserve the policy document and other related papers. In case of loss or damage of the policy document, it is your responsibility to inform the insurer of the same. Thereafter, upon obtaining satisfactory evidence, the insurer would issue a duplicate policy document.

3 Reviewing and Understanding the Policy Proposal
You should understand the features, terms and conditions of the policy and understand their implications. You must have a clear understanding of the risks covered. The nominees too must be aware of the policy terms. Remember, you have the choice of returning the policy within 15 days of issuing of the policy if you feel that the policy terms do not meet your needs.


4 Timely Payment of Premiums
Policyholders should pay the due premiums within the stated time to continue to enjoy the policy benefits and avoid policy lapse. In case you have multiple policies, it is important to track them and note the premium due dates. The premiums should be paid through the official channels.

End Note
By knowing your rights and performing your basic duties, you can enjoy all the policy benefits with peace of mind.

Health insurance – Exhaustive and Convenient

Health insurance coverage enables you to focus on a speedy recovery without worries about how medical bills will be met

Not only is the coverage offered by health plan exhaustive in nature (health plans cover pre and post hospitalisation expenses, day-care treatments, even pre-existing illnesses, etc.) but they are convenient to operate as well. ‘Assignment of benefit’ is one such convenience offered.

Assignment of Benefit

During a medical emergency, it may not be possible for either your family member(s) or yourself to complete all the documentation formalities, collect the sum assured from the insurance company and pay the same to the concerned hospital or the doctor against the medical bill. In such a scenario, you can authorise the insurance company to pay the medical service provider directly for the health care that you have received. In other words, you are assigning the benefits of your insurance plan directly to the medical service provider, without your intervention.

Assignment of benefits can only happen when a legally binding agreement is effected between the insurance company and yourself.  Standard forms are available with the medical service providers to effect the agreement. Once this agreement is in place, the hospital or the doctor can send your bills directly to the insurance company and receive the requisite payments. If there is no such agreement, you have to pay the medical costs initially and then the insurance company will reimburse you up to the maximum sum assured receivable under the health insurance plan.

Remember, after executing the ‘assignment of benefits’, if the unsurer rejects the medical bill furnished by the medical service provider, then, you have the responsibility to make the payment to the underlying doctor or hospital.

Ways to reduce the cost of term insurance

Buying insurance is an important step to secure your family’s financial well being. While you decide on a suitable insurance policy, it is wise to consider a few ways to minimise the cost of the insurance without compromising on the coverage and benefits. Read on to know how…

Buy insurance online

Generally, buying an insurance policy online is more cost attractive than buying the same policy through an insurance agent or by visiting the company office. By selling insurance online, insurance companies save on costs such as commission, administration expenses, etc. These cost benefits are passed on in the form of lower insurance charges to those availing insurance online. 

Avail insurance from an early age

Usually, amidst other considerations, buying life or medical insurance at an early age translates into lower premium outflows. Insurance premiums increase as the life expectancy of the person decreases. As one advances in age, the health risks increase and life expectancy reduces, thereby, leading to higher risks for the insurer. Higher risks translate into higher premiums. Therefore, it is wise to avail life and health insurance at a younger age.

Opt for a Long Term Insurance Plan

Insurance premiums tend to increase at an advanced age. Therefore, by opting for a long term insurance plan, you can enjoy extended coverage at a lower cost.

Protecting your hassle-free insurance claim

Lodging your claim within the correct time period and supporting it with all factual information and requisite documents will ensure the claim is settled promptly.

For many, premiums payable on an insurance policy that does not have any savings component (i.e. when no benefits accrue on maturity) may seem an unnecessary expense. However, many a times it is the only antidote against the uncertainties of life since it provides immediate financial help. Indicated below are simple tips that will enable you to receive the policy benefits, on maturity or death, from your insurance company, in a hassle-free manner…

Þ       In case of no previous knowledge of filing a claim, take the help of the insurance agent from who the policy was purchased before filing the claim form(s). Alternately, the Life insurance company can too be contacted and assistance can be taken from its office bearers.

Þ       File the insurance claim within the time period specified in the policy document. Any delay may result in the rejection of the claim.

Þ       In case of the unfortunate death of the life insured, certain original/certified copies should mandatorily be enclosed with the claim form. These include:

• Original policy bond
• Original/certified copy of the death certificate issued by the municipal authorities.
• Doctor’s certificate who attended the life insured at his/her last moment.
• Other medical/hospitalization records.
• Burial/Cremation certificate issued by the funeral authorities.

·       In case of death due to unnatural causes, duly certified police, postmortem and inquest reports.

·         Identity proof of the the beneficiary.

Is it important to have additional life insurance cover?

As you advance through different stages of life, your responsibilities and priorities change, thereby necessitating a review of your finances. Here are some milestones which demand a revisit to your insurance cover…

As a youngster, you may not have many financial responsibilities. However, as you grow older, you tend to assume additional responsibilities associated with spouse, children, retired parents and so on.  In such a scenario, the existing life insurance cover many not be enough to cover your new responsibilities. To ensure you enjoy a sufficient insurance cover at all times, indicated below are a few milestones on reaching which you need to review your existing insurance coverage:

Becoming a spouse

Along with all the happiness, married life also brings with it additional responsibilities. If you are the only earning member, it is crucial for you to be adequately insured so that your family is secure in case of an unfortunate event. Even in case of couples wherein both members are earning, the unexpected loss of a spouse could place the other in financial distress. Getting additional insurance once you marry will ensure your peace of mind and help you cope with your added responsibilities.

Becoming a parent

When you are blessed with children, your responsibilities increase. Your children are dependent on you for a very long period of time. Along with routine expenses, you would have to save lump sums of money for their education, marriage, etc. Having adequate insurance which would help you achieve these desired goals will ensure that their dream will not remain unfulfilled even in your absence.