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As a policyholder, you have certain rights and duties towards your policy. Your nominee, the person who will receive the assured money in case of your demise during the policy period, also has rights and duties to perform for a smooth claim settlement. Read on to know more about these rights and duties.
As a policyholder, you have the following rights:
You can appoint any person close to you as your nominee. Ideally, the person should be able to make a judicious use of the sum assured received to help your family stay financially independent. Your nominee can be your spouse, parents, children, or relatives. The new rules under the Insurance Laws (Amendment) Act 2015 have brought clarity in appointing a nominee, eliminating chances of disputes among family members over receiving death benefits.
Before the enactment of the new rules, your nominee was supposed to receive the life insurance money and distribute it among your legal heirs. The amended act has introduced a concept of beneficial nominee.
You can also nominate more than one person as a nominee. In such cases, you need to mention the share (%) for each nominee.
The amended act has introduced a concept of beneficial nominee that includes your immediate family members only - spouse, parents, or children. The new rules state that if you make any of your immediate family members as a nominee, he/she is entitled to receive the death benefit from your life insurance policy. Other legal heirs cannot claim on the money. Also, you can name various nominees for your life insurance policy and outline the exact contribution from the proceeds.
The new rules give rights to your nominee to receive the money on maturity of your life insurance policy in the event of your demise before receiving the corpus. Before enactment of the rule, your nominee could collect the sum assured only in the event of your demise during the policy term and not if you survived till maturity, but passed away before getting the maturity amount. Thus, the new rules bring the much-needed transparency in appointing a nominee, entitled to receive the benefits from life insurance policy.
Yes, you can. However, in this case, you need to list an ‘appointee’ to receive any claim paid in case of your demise during the policy period while the nominee is a minor.
You need to specify the minor's date of birth, name of his/her appointee and the nature of the relationship with the appointee. You can instruct the appointee directly or through a Will to take care of the sum assured received.
In such as a case, you need to make a fresh nomination.
As a policy holder, you have these duties:
Your nominee has the following rights:
The duties include:
Life insurance is a contract governed by the principle uberima fides i.e it is a contract of utmost good faith.. Being aware of your rights and duties go a long way in making the best use of your policy to cushion your dependents from financial risks.
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