In these unpredictable times of stress and challenges, human life can be cut short in a matter of seconds. In this scenario, insuring oneself via a life insurance cover is a good idea because it not only gives you a buffer against unforeseen situations but also safeguards your family's future financial needs.
In simple terms, a life insurance policy is a legal agreement between an individual (policy holder) and an insurance company, where the individual pays a certain sum or premium to the insurance company. In the case of death of the policy holder, the insurance company will pay out the death benefit to the named beneficiary.
Both related people like spouse, siblings, children and unrelated ones like friends etc qualify under the category of a nominee in a life insurance policy. However, it is always best to appoint the next of your kin or a relative as a nominee to avoid any hassles later. You can also choose to have a single or multiple nominees to your policy.
A nominee is usually chosen while buying the policy by providing details in the proposal form. However, it can also be done any time during the tenure of the policy.
• Appointing a nominee means any disputes and delays are avoided after the policy holder's death.
• Peace of mind that your assets will go in the right hands.
• The policy money will secure the financial future of your nominee.
• One needs to provide the insurer the person's details such as the full name of the nominee as it appears in his official documents, address, and age.
• The relationship between the nominee and the policy holder needs to be explained.
• If a minor i.e. a person less than 18 years is being appointed as a nominee then the policy holder has to give an appointee.
• The most obvious thing is to inform the insurance company about the policy holder’s death as soon as possible, because this will set the process of claim in motion.
• The insurance company will require a correctly filled-up claim form with all the requisite details.
• A Certificate of death is also mandatory to be furnished.
• The Policy document has to be also handed over to the company to ensure everything is in place.
• Deeds of assignments/ re-assignments if any should be handed over to the company.
• Legal evidence of title, if the policy is not assigned or nominated will help in smoothening over any possible hassles that may arise, later.
• Form of discharge executed and witnessed is also required.
• Other documents such as medical attendant's certificate, hospital certificate, employer's certificate, police inquest report, post mortem report etc should be kept handy.
There are a plethora of life insurance options available in the market today, with insurance companies offering innovative products. You should always read the fine print carefully before making a decision. It’s also a good idea to compare policies online for the various features and benefits offered so that you can make the most informed choice.