Nominee and Beneficial Nominee in a Life Insurance Policy: The loss of a loved one is real tough! The dependents have to cope up with this great loss and also the financial burden that comes with it. Life insurance to some extent will help to tide over the financial burden they may face & this makes it important to know how to claim the insurance benefits upon the death of a loved one.
A death claim is an amount that goes to your loved ones after your death during the policy term, only those people you’ve nominated in your Life Insurance policy – A nominee, will be eligible to receive the death claim.
Who is a nominee?
He/she is the person appointed to receive the death benefits from the insurance company and distribute it to the insured’s legal heirs. The responsibility of the nominee is to ensure the benefit reaches the intended recipient. Hence, it’s vital to make the nomination when you apply for life insurance.
A nominee should be an immediate family member like spouse, parents, children or any other dependent family member so that the very purpose of insurance is served and the claim money reaches the intended recipients. It is also possible for non-family members to be beneficiaries if his/her name is included in the provisions of the will. On the death of the policyholder during the policy’s term, the nominee must get in touch with the company at the soonest with the ‘claim intimation’ form & requisite documents. Once the claim process is completed, the claim amount gets transferred in the nominee’s bank account. The insurer is required to settle a claim within 30 days of receipt of all necessary documents.
Who is a beneficial Nominee?
A nominee holds no absolute rights on the benefits unless he/she is the beneficial nominee. By nominating the ultimate beneficiary as a nominee, the claim process can be made hassle-free and also prevent disputes between nominees and beneficiaries in future. Legal heirs of the insured person could share the insurance policy payout only if all of them are named as beneficiaries.
There is a provision to change the nomination in the life insurance policy at any time during the policy tenure. Also, you can appoint multiple nominees with percentage of shares mentioned against each one of them. Appointing the right person is very essential while availing any life insurance plan.
Consult a Life Insurance agent in Dubai to know more about Nominee and Beneficial Nominee in a Life Insurance Policy .