| Can We Change the Nominee in Term Insurance? Yes, you can change the nominee in your term insurance policy anytime during the policy term. Life events like marriage, divorce, or the birth of a child may prompt such changes. The process is simple—just submit a nominee change form along with ID proof of the new nominee, either online or offline. |
A term plan protects your family, but only if the right person gets the money. That’s where the nominee comes into the picture. It’s the person who’ll receive the payout when you’re not around. Life changes—marriage, kids, divorces—so your nominee may need to change too. Luckily, the answer to “Can we change the nominee in term insurance?” is simple. The best part? Yes, you can. Changing your nominee is super easy. One form, a quick update, and boom—your policy stays in sync with your life.
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Can We Change Nominee in Term Insurance: Overview
1. Who a nominee is,
2. Types of nominees (including minors and multiple nominees),
3. How to change nominee details both online and offline,
4. Documents required,
5. Key things to remember, and
6. The impact of assignments or the MWP Act.
It also highlights what happens if no nominee is listed and the importance of aligning the nomination with estate planning through a will.
Who is a Nominee in Term Insurance?
A nominee is the person you officially name to receive the death benefit from your term insurance policy if you pass away. Typically, nominees are close family members—like your spouse, children, or parents—but they can also be siblings, grandparents, or even a business partner, provided they have an insurable interest. This means the person should be financially or emotionally dependent on you or stand to suffer a financial loss in your absence.
Can You Change the Nominee in Term Insurance?
Absolutely.
Term insurance policies offer flexibility when it comes to updating your nominee. You’re not locked into the choice you made when you first bought the plan or when you renewed it— you can revise it anytime while the policy is active.
Changes in your personal life often necessitate a review of your nomination. For instance:
- You’ve gotten married or legally separated
- You’ve had a child and want to include them
- Your current nominee has passed away or is no longer the right choice
These events can impact who you’d want to cover in your absence, so it’s essential to ensure your policy reflects your current preferences. The update process is typically simple and doesn’t involve any major cost — just a few documents and a formal request to your insurer.
Types of Nominees
When it comes to term insurance, choosing the right nominee is about making sure your money reaches the intended hands. There are several types of nominees you can opt for, each serving a different purpose:
1) Beneficial Nominee
These are your closest kin (legal heir) — spouse, children, or parents. If you name them, they’re not just custodians of the money — they own it. No legal tussles, no disputes. The insurer pays them wholly and directly.
2) Minor Nominee:
By law, minors cannot directly receive or manage financial proceeds from an insurance policy. To ensure that the funds are handled responsibly until the child comes of age, insurance companies require you to appoint an adult known as an appointee.
The role of the appointee is as follows:
- The appointee acts as a custodian or caretaker of the insurance money until the minor nominee turns 18.
- Their responsibility is to receive and manage the claim payout on behalf of the minor.
- Once the minor reaches the age of majority (18 years), the appointee’s role ends, and the funds must be handed over to the nominee.
- The appointee must be an adult (18+ years) and is often a trusted relative or guardian of the child (Grandparents, adult sibling, spouse, aunts/uncles).
3) Multiple Nominees:
You can also split the benefit among multiple nominees (say 60% to your spouse, 40% to your child). Ensure that you declare the percentages in the policy.
| Note: Assignment vs. Nomination In life insurance, assignment and nomination serve different purposes, and assignment always overrides nomination. 1) When you assign a policy, either fully (absolute assignment) or partially (e.g., as loan collateral), the assignee becomes the legal owner to that extent and receives the policy proceeds directly. 2) The nominee has no claim once the assignment is in place. 3) Partial assignment is common when pledging a policy to a bank or insurer for a loan — the assignee can claim up to the loan amount, while the balance (if any) goes to the nominee or legal heirs. 4) Assignment is also used in estate planning, such as transferring ownership to a trust or guardian for a special needs child. 5) Because an assignment alters ownership rights, it must be formally registered with the insurer and should only be done after consulting a financial or estate planning expert. |
Who Can Be a Nominee?
Your nominee is usually someone with an insurable interest—someone who would face a financial loss if you're no longer around.
1. Kin Nominees: This typically includes immediate family members like your spouse, children, or parents. They’re considered beneficial nominees, meaning they’re legally entitled to receive the claim amount without complications.
2. Non-Kin Nominees: You can also nominate others like extended relatives, close friends, or even a business partner. In such cases, insurers may ask for extra documents to establish the relationship and the reason for nomination. For business partners, if there’s a clear financial dependency or shared liability, they can be nominated. However, for purely business-related protection, it’s better to explore dedicated plans like Keyman Insurance, which are designed for covering financial loss due to the death of a key person in a business.
How to Change the Nominee in a Term Insurance Policy
Whether it's due to marriage, kids, or any personal reason, you can and should update your nominee. Here's how to do it easily—online or offline.
Offline Process
- Visit the nearest branch office or contact your insurer’s customer care.
- Obtain and fill out the Nominee Change Request Form.
- Attach required documents:
- Identity and address proof of the new nominee
- Relationship proof (if applicable)
- Appointee details (if the nominee is a minor)
- Submit the completed form and documents in person or via registered email.
- Collect an acknowledgment or updated policy endorsement from the insurer.
Online Process (Easier & More widely used)
- Log in to your insurer’s customer portal or mobile app.
- Navigate to the Policy Details or Nomination Update section.
- Fill in the updated nominee’s details:
- Full name, date of birth, relationship, and address
- Share percentages if there are multiple nominees.
- Upload the required documents (ID/address/relationship proof).
- Submit the request and await confirmation from the insurer.
Documents Required to Change Nominee
When updating your nominee details in a term insurance policy, keep the following documents ready to ensure a smooth and hassle-free process:
- Nominee Change Request Form – Duly filled and signed by the policyholder.
- Identity Proof of the New Nominee – Aadhaar, PAN, Voter ID, or Passport.
- Address Proof of the New Nominee – Utility bill, Aadhaar, bank statement, etc.
- Relationship Proof – Documents like a marriage certificate or birth certificate (especially for close family members).
- Original Policy Bond or Policy Number – Required for endorsement or internal verification.
Important Things to Remember
Before you finalize your nomination or make changes, keep these key points in mind to avoid any surprises later:
1) The Nominee Can Be Changed Multiple Times
You’re free to update your nominee as many times as needed during the policy term, especially as life circumstances change.
2) Update: If the Nominee Passes Away
If your nominee dies before you, make sure to nominate someone else immediately to avoid claim issues.
3) Assignment Overrides Nomination
When you assign your life insurance policy to a bank (e.g., as collateral for a loan), the bank becomes the primary beneficiary. This means the bank will receive the claim amount first, up to the outstanding loan amount. Your nominee will get only what's left (if anything). So, make sure your family is aware of this arrangement to avoid surprises during claim settlement.
4) Keep a Copy of the Assignment/Nomination Acknowledgement
Always obtain a written confirmation from your insurer, either as a physical letter or an email, once an assignment or nomination is registered. This serves as crucial proof in case of future disputes.
Remember, the main policy document is usually not reissued or updated when a nominee is changed. Instead, the change is recorded via an endorsement note, which makes this acknowledgement all the more important to keep safely.
5) Keep the Nominee and the Insurer Informed
Many people are unaware they've even been listed as nominees in a life insurance policy—until they're unexpectedly contacted during a claim. This can lead to confusion, delays, or even disputes. To avoid such situations, it’s important to:
- Inform your nominee that you’ve added them, and have a clear conversation about the policy details and what to expect.
- Update your insurer if there’s any change in the nominee or contact details, so the records stay accurate.
A simple, transparent conversation today can make the claim process smoother and stress-free for your loved ones tomorrow.
6) MWP Act Restrictions
If your policy is registered under the Married Women’s Property (MWP) Act, the nominee (typically your wife and/or children) cannot be changed later. The benefits legally belong to them, and the nomination becomes irrevocable.
You can read about nomination from The Insurance Act, 1938 document here. Apart from that, here’s a snippet from the policy wording of a popular insurer’s flagship term plan to better illustrate the things to keep in mind:
What Happens If There’s No Nominee?
If there’s no valid nominee at the time of your death—whether because you didn’t nominate anyone, failed to update the nomination after the nominee passed away, or both you and the nominee died together—the policy proceeds become part of your legal estate. Your legal heirs will then need to obtain a succession certificate through the court to claim the money. This process can be lengthy, costly, and emotionally taxing.
While nominating someone is now legally mandatory when buying a life insurance policy, keeping nominee details updated (e.g., after marriage, divorce, or death) is still the policyholder’s responsibility. Insurers do not track life events—you must proactively inform them.
Also, while nomination helps identify who receives the money, it does not always ensure legal ownership, especially if the nominee is not a close family member.
That’s why, alongside nomination, it is strongly recommended to create a legal Will. A Will clearly outlines who should inherit your assets, including life insurance proceeds, and helps avoid disputes among heirs. It also ensures that your money goes exactly where you intended.
To do this properly, it’s wise to consult an estate planning lawyer. They can help you:
- Draft a valid and legally enforceable Will,
- Align your nominations with your overall estate plan,
- Avoid legal ambiguities and family conflicts.
A Will and an updated nomination together provide comprehensive protection for your family and ensure that the claim process remains smooth and undisputed.
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Conclusion
Changing your nominee in a term insurance policy is simple, flexible, and absolutely essential as life evolves. Whether it's marriage, a new child, or personal changes, keeping your nomination updated ensures your loved ones get the rightful benefit without legal hassles. So, review your policy regularly and make changes whenever needed.
FAQs
Can we change the nominee in term insurance?
Yes. You can change your nominee any time during the policy term by submitting a simple request to your insurer along with the required documents.
Can I have multiple nominees?
Yes. You can nominate more than one person and specify the percentage of the death benefit each will receive. Just ensure the split% % is clearly mentioned in the nomination form.
What if the nominee is a minor?
If your nominee is below 18 years of age, you must appoint an appointee (an adult) who will receive and manage the claim amount on behalf of the minor until they come of age.
Are there charges to change the nominee?
Generally, no. Most insurers allow you to update your nominee free of cost. However, some insurers may charge a nominal fee. It's always best to confirm with your insurer.
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