More people now understand the importance of getting an insurance plan. As death is inevitable and untimely, a life insurance plan is meant to give financial security to your beneficiaries in the event of your passing. However, before you avail any life insurance plan, it’s important to know who is qualified to get the claim.
Who can be a beneficiary?
A beneficiary is entitled to get the benefits under the policy in the event of the policy holder’s death. Beneficiaries could be your parents, spouse, children or anyone who has the rights as per will provisions. If the will is not present, succession law decides on identifying the legal heirs.
Upon availing a life insurance plan, the policyholder is requested to indicate nominees in the proposal form who will be entitled to receive the policy benefits. If the nominee is not the beneficiary, then the nominee must transfer the benefits to the ensuing beneficiaries as per the will or as decided by the succession law.
What is the difference between a Nominee and a Beneficial Nominee?
A nominee is appointed to collect the benefits from the insurance company and distribute it to the insured’s legal heirs. The nominee must ensure that the beneficiaries receive the paybacks, that’s why it’s important to make a good decision on selecting your nominees.
A nominee must be an immediate family member (parents, spouse, children or any other dependent family member) so that the benefits reach the legitimate beneficiaries. If the name is included in the will, non-family members can also be listed as a beneficiary. A nominee holds no rights on the benefits unless he/she is also the beneficial nominee.
Make sure to designate the eventual beneficiary upon availing life insurance plan to avoid disputes between nominees and beneficiaries. While disagreements can be settled through civil court, it could be a lengthy process. To also make the claiming process hassle-free, it’s advisable to appoint the ultimate beneficiary as the nominee.
You can make changes on the nomination in the life insurance policy at any time during its tenure. Also, you can nominate multiple nominees and decide on the portion percentage of their benefits.
Make sure to appoint the right person for your life insurance policy. The appointed nominee can receive the benefits in case of unexpected events. Acknowledge who receives the claims and appoint someone you could trust to provide the benefits to the intended recipient. We recommend that you keep on reviewing your policies and make necessary changes.
To know more about the processes and policies, contact a life insurance company today. We at Nexus Group are the largest award-winning Financial Advisor in the GCC region that offer a composite suite of insurance, savings, and investment products to both corporate and individual clients from a range of international and domestic product providers.
As qualified professionals, you can trust us. As an independent organisation, free from ties to a product provider, we can meet those needs with carefully selected solutions from the world’s foremost financial services & insurance companies.
Contact us now to better understand life insurance plans!