New rules benefit insurance nominees4 min read . Updated: 26 Apr 2015, 09:23 PM IST
If immediate family member is named beneficial nominee, the person will get the insurance money
As a financial product, a life insurance policy is the most meaningful for your dependants as it promises to protect them financially in the event of your death. Therefore, when you buy a life insurance policy, it is important to mention a nominee who will be entitled to the insurance money in the event of the policyholder’s death during the policy term. However, till now, nominating someone didn’t necessarily mean that the nominee would be the ultimate beneficiary of the insurance money. “Previously, by law, the nominee in a life insurance was meant to receive the death benefit from the insurance company and distribute to the insured’s legal heirs. This created confusion because policyholders thought that the nominees they specified would be the eventual beneficiaries if they died," said Kapil Mehta, executive director, SecureNow Insurance Brokers Pvt. Ltd.