Most people carefully select a nominee when purchasing a life insurance policy. However, very few reviews or update nominee details later in life.

As families grow and circumstances change, nominee details can become outdated without the policyholder ever realizing it. Unfortunately, this issue often comes to light only when a claim if filed.

A Real Life Example

A husband purchased a term insurance policy and names his wife as the nominee. Years later, his wife unfortunately passes away. The husband continues paying the premiums regularly but never updates the nominee details in the policy.

After some time, the husband also passes away. Now, when the legal heir approaches the insurance company to file a death claim, the claim process may require additional verifications and supporting documents.

What Additional Documents May Be Required?

Depending on the circumstances, the insurer may request documents such as

·       Death Certificate of the Life Insured

·       Death Certificate of the Nominee

·       Succession Certificate

·       Legal Heir Certificate

·       Other Supporting documents as required

While the claim may still be payable subject to policy terms and documentations, the process can become more complicated and time consuming.

Why does this Matter?

The purpose of nominating someone is to make the claim settlement smoother for your loved ones. When nominee details are outdated, insurers may need additional documents to establish the rightful claimant. This can result in

·       Additional paperwork

·       Longer claim processing times

·       Delays in claim settlement

·       Stress to family members during already difficult period

Most of these complications can be avoided through periodic reviews.

The Simple Solution

 Set aside just 10 to 15 minutes every six months to review nominee details across all your financial assets. This includes

·       Life insurance policies to ensure that the nominee details reflect your current family situation.

·       Bank account details, such as savings account, fixed deposits and other banking relationships.

·       Mutual fund investments, making sure that nominee records are up-to date.

·       Demat Account details, whether nominee information is correctly recorded.

·       Other financial assets, where nomination facilities are available

When should you review Nominees?

Consider reviewing nominee details whenever there is a major life event, such as

·       Marriage

·       Divorce

·       Birth of a child

·       Death of a nominee

·       Change in family circumstances

Life changes and your nominations should change with it.

Final Thought

Many people spend years building financial security for their families. However, a simple administrative oversight can create unnecessary complications when those benefits are needed the most. A small update today can save your family significant time, effort and stress tomorrow.

Review your nominees. Keep your records updated. Protect your family’s future

INSURANCE AWARENESS > INSURANCE IGNORANCE