A term life insurance is one of the most popular investment instruments that you should have in your financial portfolio. Let us understand what is term insurance before speaking about its features, benefits, and importance.
A term insurance plan is a simple life insurance policy that provides cover to the policyholder for a specific period. One of the significant benefits of purchasing a term plan is offering high cover at an affordable rate. While buying term insurance plans, make sure that the sum assured is more than the total of your household expenses and financial aspirations so that your family lives a peaceful life after your absence. While buying a term insurance policy, you have to be particular about the sum assured, tenure, and the brand value of the insurance company. Besides this, one essential thing to consider is the appointment of the nominee of the policy.
The nominee or beneficiary of the policy will receive the death benefits in case of any untoward incident with you. A nominee could be anyone like your brother, sister, mother, father, wife, son, daughter, or relative. You will need to fill in all the necessary details of the person while purchasing term insurance plans in India. The nominee that you appoint will be authorized by you to receive the sum assured in case of an unfortunate event. Therefore, you should select someone who is responsible and take care of your family in your absence.
How can you change a nominee of your term plan?
Let us understand the step-by-step procedure of changing a nominee. The circumstances of life may necessitate you to change the nominee of your policy. Due to the death of the existing nominee, or when you lose the trust of the person you appointed as a nominee, you must change the beneficiary of your term plan. This process is easy; all you have to do is follow the steps outlined below:
- Change the policy’s nominee online or via the traditional method of filling a form and submitting it to your insurer
- Submit the nominee change form and the new nominee’s necessary documents along with the policy document
- On submission of the nominee change form, ensure that you get an acknowledgment from the insurer so that the nominee does not have to face any hassles in the future
- You can appoint more than one nominee. It is advisable to have a couple of nominees as life is full of uncertainties
Importance of appointing multiple nominees
You can nominate numerous nominees for your term insurance plans in India. In such a case, it allows you to decide how you want the nominees to share the sum assured.
Change of nominee after your marriage
When a person purchases a term plan before marriage, there are chances that the nominee maybe their parents. However, after marriage, the responsibilities of a person increase significantly, especially after having a child. In such a case, the policyholder may plan to change the policy nominee and instead appoint the spouse as the nominee. The change in nominee also takes place in case the parents pass away due to old age.
You can even add your child who is below the age of 18 as a nominee of your policy. The only thing you need to do here is select a responsible appointee who can receive the sum assured during your untimely absence while your child is aged below 18.
As numerous insurance companies provide various term insurance plans, it becomes extremely vital to purchase your term policy from a reputed company. Therefore, you can have peace of mind that your family is well protected financially even when you are absent.