Changing the nomination for insurance policy is all about updating the beneficiary designation. This is basically deciding who gets the benefits of the policy if the insured person dies.
Understanding nomination of life insurance policy:
1. Beneficiary Designation:
• When you take out an insurance policy, you gotta pick one or more beneficiaries who will get the policy money (also known as the death benefit) when you pass away.
• Your beneficiaries can be individuals like your family or friends, or even organizations like trusts or charities.
2. Types of Nomination:
• Revocable Nomination: With this type, you can change the beneficiary designation whenever you want, without needing the consent of the existing beneficiary.
• Irrevocable Nomination: You can't change the beneficiary designation unless the existing beneficiary agrees to it.
Reasons for a change nomination in lic policy:
1. Life Changes:
Getting married, going through a divorce, having kids, or experiencing the loss of a beneficiary can all lead to a need for change nomination in lic policy to reflect the new circumstances.
2. Change in Relationships:
When your personal relationships or dynamics shift, it's common to feel the urge to change nomination in lic policy.
3. Estate Planning:
Sometimes, changing your nomination is part of a broader strategy to ensure that your assets are distributed in line with your wishes when it comes to estate planning.
How to change nominee in lic policy:
1. Call the Insurance Company:
• Instruct your client to call the insurance company and find out what they need to do to change the nomination for insurance policy.
2. Change Nomination Form:
• The insurance company will then send a life insurance nomination form for the policyholder to change the nominee.
3. Fill in Relevant Details:
• The policyholder fills in details like policy number, current nomination, details of new beneficiary etc.
4. Send the Form:
• The form is then sent to the insurance company by post, email or online submission if the facility is available.
Why should I keep my Nomination updated:
1. To Ensure that Benefits are Paid to Intended Beneficiaries:
• By keeping the nomination form updated, the proceeds of the policy will be paid to the intended beneficiaries.
2. Prevent Litigation:
• It prevents litigation by family members or other claimants for the proceeds of the insurance policy.
3. To Express Current Intentions:
• A policy holder’s circumstances or relations with others may change. The nominee may not always be the appropriate person at all times. Hence, the policyholder may wish to change the nomination form to express his current intentions.
