Insurances fall under various heads. Many of you would get your credit cards insured. There is home insurance, property insurance, and so many others. You must be wondering if the equipment with your Optimum 400 is insured or not. Well, your ISP can answer that better. The most common type of insurance that you hear of is life insurance. There are tons of plans thrown at you by banks and other financial companies. But many of us do not know much about life insurance. Especially about the nominations. So here it goes.
A Nominee can’t Use the Money
A nominee is just the receiver. Being a nominee does not give that individual the right to use the money as well. This holds true unless the nominee becomes a legal heir. Till then, the nominee is just the receiver or the holder of the money. In case, there are no legal heirs, they won’t get the right maturity benefits. In an event where the policyholder dies, all the money and benefits will be given to the nominee(s). In case there is no nominee, the legal representative will receive all the money and the benefits (if there are any).
Individuals need to understand that the nominees need to hand over the money to the legal heirs, eventually.
Beneficial Nominee can Use the Claim Money
When you go to a life insurance company, the person who guides you should add to your knowledge. Because the chances that you don’t know much about life insurance and the nomination process are high. You should read it before you go through.
However, you should know that there is a difference between a nominee and a beneficial nominee. The difference lies in the usage of money. The beneficial nominee can use the claim money. It is the right of the beneficial nominee. In fact, they are entitled to it and all the other maturity benefits as well. This is because the beneficial nominee is the final receiver of the settlement money.
Even if you do not name a beneficial nominee, there are certain people or relations in your life who are your beneficial nominees by default. For example, your parents, children, or your spouse.
Minor as a Nominee
In case you are wondering about the age of a nominee, you should know that even a minor can be a nominee. Your agent cannot stop you from doing so. If you decide to nominate someone and he/she is under the age of 18 (a minor), you can do so. The minor will then receive the benefits in case of the person’s untimely death. However, there is a little rule that applies as well. A person can make the minor a nominee but the minor will only receive the money and the benefits once he turns 18. He cannot claim the money before that.
Alterations and Cancellations Allowed
If you choose a nominee once and state it, that does not mean that you cannot change your mind. You can always make alterations and cancellations to your nominations. Because no one knows that the person might undergo some unforeseen tragedies. Like a divorce or separation. Under such circumstances, the person can make alterations. The person making the claim has the right to change the name of the nominee or even cancel it altogether.
In case the Nominee Dies
There might be a situation where the policyholder, as well as the nominee, dies before the settlement is made. In that case, the legal heir will receive all the money and the benefits. In case the nominee dies before the policyholder, the money will still go to the legally recognized heirs. Or the person who is holding the succession certificate at that time.
If there is no Nomination
In case the policyholder does not nominate anyone, there is a rule for that as well. In such a situation, the legal heirs will reap all the benefits and get all the money. However, the best practice for a policyholder is to nominate someone in his lifetime. This saves the next of kin from all the unnecessary hassles. Therefore, companies should encourage their clients to nominate a person.
If the Policyholder Nominates
In case, the policyholder nominates his wife, parents, children, or any one of them, then the company has to pay that beneficiary the amount. However, if the policymaker does not mention someone as the beneficial nominee, then he cannot receive the money or the benefits.
Make sure that you are well aware of all the rules and policies that apply to the life insurance nominations. The chances that your agent will try to fool you are very high as well. You should be well aware of the clauses and the rules that apply. While you educate yourself, I am going to give a call to the Cox customer support number to see if I can claim the insurance on any of the equipment that they give.
