Why it’s Important to Add Nominee Details in your Insurance Plan

Congratulations on being a proud member of Onsurity! With your membership, you and your loved ones can enjoy a plethora of incredible benefits. From convenient doctor teleconsultations to comprehensive insurance coverage, discounted pharmacy services, and lab tests, the Onsurity Super App offers an array of advantages for you and your loved ones. 

However, we would like to shed light on a crucial aspect of your membership that deserves your attention: adding a nominee  in insurance plan. This simple step holds immense importance in ensuring a smooth claims experience, preventing legal complications, and providing absolute peace of mind for your family. So, let’s dive in and understand the significance of adding a nominee to your insurance. 

What is the nominee in Insurance plan?  

When purchasing life or personal accident insurance, it is essential to know about the role of a nominee. Nominees play a significant role in ensuring that the intended beneficiaries receive the death benefits in the unfortunate event of the insured’s demise. Without a designated nominee, the benefits of the insurance policy may face delays and complications. To ensure the protection of both the insured and their family, it is essential to understand and assign a nominee on priority.  

Who is a nominee in the Insurance plan? 

A nominee in insurance is an individual who is designated to receive the death benefit in the event of the insured person’s demise. The death benefit encompasses the policy’s sum assured, along with any applicable bonuses. Insurance companies typically advise policyholders to designate family members as nominees, as they are more likely to utilize the benefits provided by the policy. Section 39 of the Insurance Act, of 1938, permits policyholders to nominate one or more family members or relatives. The nominee can be anyone, including a spouse, parent, sibling, or child.  

If you are an Onsurity member and have not yet added a nominee, it is important to do so. Read on to understand the significance of naming a nominee in insurance. 

Importance of nominee in insurance 

The primary reason for appointing a nominee in insurance is to ensure that the accumulated policy benefits are transferred to the nominee in the event of the policyholder’s disability or death. 

Naming a nominee also offers the following advantages: 

1. Avoidance of legal complications: According to the Indian Succession Act, if a policyholder does not designate a nominee, the insurance policy’s proceeds are distributed among the legal heirs. This can lead to legal issues and delays in the disbursement of the claim amount.
2. Protection of your family’s financial future: By naming a trusted individual in your family as a nominee, you can ensure that the funds are utilized to meet the financial needs of your family.
3. Swift claim settlement process: When the insured has named a nominee, the claim settlement process becomes more streamlined for insurance companies. The nominee is required to submit the necessary documents to receive the policy benefits. 

Types of nominees 

When selecting a nominee, insurance companies provide flexibility and offer various options. It is crucial to choose a trustworthy person who will receive the death benefit in your absence and take care of your entire family. Here are the types of nominees in insurance: 

1. Beneficial nominee: Immediate family members such as your spouse, parents, or children can be appointed as beneficial nominees. Only these family members are eligible to receive the death benefit.
2. Minor nominee: Many policyholders choose to name their children as nominees. However, if the child is below 18 years of age, a custodian must be assigned to handle the policy proceeds. The death benefit is paid to the custodian if the nominee is below 18 at the time of the policyholder’s death. It is important to select a trustworthy individual as the custodian who will manage the funds until the child reaches 18.
3. Non-family members as nominees: If you do not have immediate family members (spouse, children, or parents), you have the option to nominate a non-family member as a nominee. This can be a friend or a distant relative. However, it is crucial to note that even if a non-family member is nominated, the legal heir can still claim the death benefit under the same policy. The non-family member nominee acts as a custodian of the death benefit. It is important to inform the legal heir about the nominee to avoid future legal disputes.
4. Multiple nominees: If you wish to distribute the death benefit among different family members, you can name multiple nominees. You can assign a specific percentage of the coverage amount to each family member to prevent future disputes.
5. Successive nominees: A policyholder can name multiple successive nominees under the insurance policy. If the first nominee fails to receive the policy benefits, the insurer will pass on the benefits to the second nominee. There is no predefined limit to the number of successive nominees you can name. 

 Understanding the different types of nominees can assist you in selecting the right nominee for your insurance policy. 

Things to consider when selecting a nominee in the Insurance plan

 When selecting a nominee, it is crucial to consider the following factors: 

1. Age of the nominee: Ensure that the nominee is of an appropriate age. Choosing a minor as a nominee or selecting an elderly individual who may have difficulty handling finances can lead to complications.
2. Relationship with the nominee: Select a nominee whom you trust completely. This can be your spouse, children, siblings, or parents.
3. Health of the nominee: Consider the nominee’s health status. If their health is not stable, they may face challenges in managing their finances and taking care of dependents in the event of their untimely death.
4. Financial dependents: Consider the number of financial dependents you have. If you have a large family and multiple dependents, choose a nominee who can distribute the benefits within the family equally.
5. Personal and professional background: Consider the personal and professional background of the nominee. It is important to ensure that the nominee is not involved in criminal activities or does not have a negative reputation in society. 

 For your Onsurity membership, it is mandatory that you add only blood relatives as nominees. 

Difference between the nominee and legal heir 

 Nominee 

• An individual is chosen by the policyholder to receive the policy benefits. 
• The nominee holds the property or benefits in trust for the legal heir. 
• The nominee has limited rights over the assets. 
• The process of nomination is relatively simple and quick.
   

Legal Heir 

• The person designated by the policyholder’s will or as determined by the law to receive the policy benefits. 
• The legal heir is the actual owner of the property or benefits. 
• The legal heir has full rights over the assets. 
• Inheritance through legal heirship follows the legal process, which may involve legal formalities and can be more complex and time-consuming compared to the nomination. 

A nominee is someone chosen by the policyholder to receive the benefits on behalf of the legal heir. The nominee holds the benefits in trust, while the legal heir is the rightful owner of the property or benefits. The legal heir has full rights over the assets, whereas the nominee has limited rights. Nomination is a simpler and quicker process compared to the legal inheritance procedure. 

Dos and don’ts when naming a nominee in your Onsurity Healthcare membership 

You can declare your nominee easily through the Onsurity app.  

Dos to follow when adding a nominee:

• Add nominee details through the app or our WhatsApp bot 
• Update nominee details as per government ID card 
• Only blood relatives (father, mother, siblings, spouse, and children above the age of 18) can be added as nominees 
• A custodian needs to be declared in case a minor is added as a nominee
• Log on to the Onsurity app to check policy coverage and benefits 

 Don’ts to remember when adding a nominee: 

• Don’t add yourself as a nominee
• No friends can be added as a nominee
• Wrong nomination can lead to claim rejection or delay in claim settlement
• If the wrong nominee is added, benefits will be given to the legal heir(s) 

If you do not opt for a nominee, it will mean that you agree with the T&Cs, as given hereunder: 

“I hereby confirm that I do not wish to appoint any nominee in my GPA/GTL policy and understand the issues involved in non – appointment of the nominee and further are aware that in case of death of the insured, my legal heirs would need to submit all the requisite documents/information for claiming the amount in my policy, which may also include documents issued by Court or other such competent authority, based on the value held in the policy.”