What happens to my policy if I have no dependents or nominees?

When you buy a Life Insurance policy, you are required to nominate a person or a group of persons who will receive a financial cover in the unfortunate event of your passing, or on maturity of the policy. The nominees are usually your immediate family members – your spouse, your children or your parents.
Although it is not mandatory to appoint a nominee, doing so ensures quick processing of claim requests and prevents operational hassles. So, at the time of purchasing a Life Insurance policy, make sure to appoint your nominees with their correct details.

I only have a minor as a nominee.

As minors are not legally competent to enter into a contract and receive claims directly, you would have to appoint a custodian for him or her. Until the nominee turns 18, the sum assured is given to the custodian, provided the need arises for it.

I have way too many nominees. How do I possibly decide?

If you have too many dependents or minors to nominate, you can either appoint successive nominees or multiple nominees. In the case of successive nominees, say nominee A, B and C, the claim proceeds will first be paid to nominee A. If that fails for a reason, the proceeds go to nominee B, and so on. In the case of multiple nominees, the claim proceeds are divided among the appointed nominees.
It’s always preferred to have a single nominee to make the claim process quicker and hassle-free.

I don’t have anyone to nominate.

Nominees are basically custodians of Life Insurance proceeds. So, even if you happen to not have anyone to nominate, don’t worry. Your policy payout will be handed out on the basis of these rules:

• The Life Insurance company shall pay out the claim amount to the Class I legal heir which could include your spouse, son, daughter and mother.
• In case you have a will, the process followed will be according to the Indian Succession Act, 1925 wherein the claim amount is divided according to what has been stated in the Will. A succession certificate from the court is required to be produced to clarify on who to handover the claim payout.
• If there is more than one legal heir, the Life Insurance company will ask for an indemnity bond, joint discharge statement, and waiver of legal evidence.

My nominee passed away.

In the event of the nominee passing away before the life insured, the policyholder is supposed to make a fresh nomination. You can modify your nominee details by filling a simple form. You can change your nominees as many times as you want during your policy tenure. It’s very important to understand the need of a rightful nominee to a Life Insurance policy.

After filing the application for a nominee change, make sure you receive a written confirmation of the same from your Life Insurance provider.

Given the real objective of Life Insurance, the importance of appointing a nominee is understood. Please do ensure that you have a nominee for your Life Insurance policy to ensure your loved ones receive the payout in their time of need, furthermore, only those whom you want.