Nomination is one of the many term insurance benefits that you can take advantage of when you purchase a term insurance plan. In fact, it is crucial to the core idea of term insurance itself, because the very purpose of purchasing a term plan is to ensure that the financial benefits offered under the policy protect your dependents. So, they will receive the benefits if you nominate them under the term insurance plan.
But if you’re a beginner to the whole concept of term insurance, you may be unsure of what a nominee is. Let’s find out what the term ‘nominee’ means.
What is a Term Insurance Nominee?
A term insurance nominee is an essential part of every life insurance plan. And a term insurance plan is no different. When a person purchases term insurance, they have the right to appoint a nominee. This term insurance nominee is the person who will receive the term insurance benefits in case of the life assured’s demise.
Policyholders also have the option to nominate multiple beneficiaries in the proposal form. In that case, the policyholder also has to specify the percentages according to which the sum assured will be divided between the nominees assigned to the policy.
Generally, term insurance nominees are family members who are dependent on the policyholder. This is because in case of the policyholder’s demise, the death benefits will be paid out to the nominee directly. That will make it easier for the dependent family members to cushion the financial blow of losing their sole or primary source of income.
Assigning a nominee is a quick and simple process, particularly in the case of online term insurance. You simply need to fill in the relevant details and submit the information online.