Home Finance How to Choose a Nominee for your Term Insurance Policy?

How to Choose a Nominee for your Term Insurance Policy?

How to Choose a Nominee for your Term Insurance Policy?

Given the kind of times we are living in, we often get to hear that a young man died and his family is running from pillar to post to meet their expenses. To put it honestly, none of our lives are certain. We do not know what tomorrow is bringing us. And if you are the sole breadwinner of the family, one of the major responsibilities is to keep some financial arrangement for a situation when you are not there. The best way to take care of the financial needs at that point is by taking a term insurance policy today. The sooner you buy it, the better coverage your family will receive.

Term insurance plans come with a variety of features; therefore, you should look for the one that matches your needs. The premiums are also very reasonable and should not make a hole in your pockets. You can choose to pay the premium monthly, quarterly, or annually. And then comes the part of choosing a nominee. We usually choose our spouse as our nominee but you get to choose anybody from your family who is dependent on you.

Who is a term insurance nominee?

When you buy a term life insurance plan, you have to choose a nominee. The nominee is the person who is financially dependent on you and can claim the coverage when you are not there anymore, within the tenure of the policy. The nominee can be anyone from your family.

How to choose a nominee?

Choosing a nominee means the individual is going to claim the cover amount when you are not around. Therefore, you need to choose the nominee very carefully. Here are some tips:

  • Family members: Not every family member can be a nominee. The person has to be financially dependent on you. Therefore, you can choose your spouse, kids, or any other family member as the nominee of the term insurance plan that you are going to purchase.
  • Multiple nominees: You can choose more than just one nominee. This helps when the first nominee does not survive the term insurance policy period, the other one can claim the cover amount. Choosing more than one nominee is always a wise decision.
  • Shared benefit: You can let the nominees share the death benefit. However, you need to allocate the cover amount that will be shared by the nominees that you choose.
  • Cancellation: One of the term insurance nominee rules is that you can cancel the existing nominees and change them whenever you want, and for as many times as you want.

Before you choose a nominee, you must be sure that the person will be able to take care of the rest of the members of your family. The person should have an understanding of finances and makes wise decisions when it comes to using the expenses for education, medical emergencies, and even marriage. There are many term plan policyholders, who prefer choosing a minor as one of the nominees. Well, when you do so, you also need to decide on an appointee for the minor. The appointee will claim the cover amount on behalf of the minor until he/she turns 18 years of age.

Choosing a nominee is as important as finalizing a term plan. You need to trust the person who will be claiming the money that you are going to put all the years for your family’s future security. Therefore, make sure you appoint more than one nominee and both of them are matured enough to take care of the family. If you need more guidance on the same, you can visit the IIFL Insurance website and check out all the information regarding term insurance and nominees, that are available.

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