Can We Change Nominee In Term Insurance?

Quick Overview

You can change the nominee in your term insurance policy for free (either online or offline) while the policy is active. An endorsement letter confirms it instead of a new policy document. Review and update your nominee after major life events, so the claim money reaches the right person.

Suppose you have a ₹1 crore term plan that you have paid for all these years. But what happens when you are no longer around and the claim is triggered? If the nominee listed on the policy is an outdated name that you forgot to update, the claim could be delayed or even stuck.

This article addresses exactly that situation.

We’ll guide you through understanding who a nominee is, how and when to change them, and how to make sure your term plan actually reaches the people you care about.

What is A Nominee In Term Insurance?

A nominee is the person you officially record with your insurer to receive the term insurance payout if you pass away during the policy term.

In most families, this will be your spouse, children, or parents. They are your first-degree relatives and usually also your legal heirs, which is why insurers feel more comfortable paying them.

It is a good idea to revisit your nomination regularly. This applies whenever you get married, have a child, get divorced, lose a nominee, or when your parents stop depending on your income.

Can You Change The Nominee After Buying Term Insurance?

Yes, you can change your nominee in term insurance any time while the policy is active. You are not locked into the name you gave when you bought the plan. Under Section 39 (Nomination by policy-holder) of the Insurance Act, 1938,the nomination can be made or changed at any time before the policy matures, through an endorsement that updates the insurer’s records.

Here are A few practical points to remember:

You can change your nominee multiple times. Insurers treat each new nomination as the latest valid one.
There is no charge to change the nominee. It is a free servicing request.

You do not get a fresh policy document each time. The insurer issues an endorsement letter with the new nomination, and it replaces what was printed on the original policy document.

Example: You bought a term plan at 25 and nominated your mother. At 32, you get married and have a child. Hence, you can change the nomination to match your current financial responsibilities.

Types of Nominees In Term Insurance

Blood Relative Or Beneficial Nominee

When you nominate a spouse, children, or parents, they are generally treated as beneficial nominees. Insurers pay them smoothly as they are your natural legal heirs.

Non-family Nominee

This category includes your friends, distant relatives, or a business partner. Insurers may ask for extra clarification or documentation to show why this person should get the money.

Minor Nominee

If your nominee is under 18, you must add an adult appointee who will receive and manage the money till the child turns 18.

Moral Hazard in Term Insurance

Insurers are generally careful when the nominee is not a close relative. This is linked to the concept of moral hazard, where someone may have a financial incentive in your death.

If you choose a non-first-degree relative as the sole nominee, they may ask extra questions or a Moral Hazard Questionnaire. Sole distant relatives or unrelated people may be declined as nominees.

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Steps To Change Nominee In Term Insurance

Changing your nominee is treated as a simple servicing request. You can do it either online through the insurer’s portal or offline at the branch. The change is confirmed through an endorsement on your policy records.

For a step-by-step checklist of the process, you can use the visual guide below.

Documents Required To Change The Nominee In Term Insurance

In most cases, insurers only need a signed nomination change request, KYC documents of the new nominee (and appointee if the nominee is a minor), and your policy details. For a detailed document checklist, you can refer to the visual guide above.

How To Choose The Right Nominee For Term Insurance

Start with a simple question: If your income stopped tomorrow, who would face the biggest financial shock?

In most cases, that list will read spouse, children, and sometimes dependent parents. These are your natural nominees. If you want to include others, such as a sibling who lives with you, keep their share reasonable and ensure your main dependents are fully protected.

Common Mistakes People Make While Choosing A Nominee

Keeping parents as sole nominees even after marriage and children
Forgetting to change the nominee after divorce or the death of a nominee
Not adding an appointee when the nominee is a minor
Using nicknames or incorrect spellings that do not match Aadhaar (official name)
Assuming the insurer will send a new policy document and ignoring the endorsement
Never telling your nominee about the policy or where the documents are kept can leave them confused when they need the money most.

Bottom Line: A simple annual check of your nomination, along with your policy, can prevent messy disputes later.

Why Choose Ditto for Insurance?

At Ditto, we’ve assisted over 8,00,000 customers with choosing the right insurance policy. Why customers like Pallavi below love us:

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Confused about the right insurance? Speak to Ditto’s certified advisors for free, unbiased guidance. Book your call now, slots fill up fast!

Ditto’s Take On Changing Nominees

Your term plan exists to replace your family’s income and the nomination should reflect it clearly at every stage of life. This means you should:

Prefer first-degree relatives as nominees
Split the benefit in line with who actually depends on you
Keep names and birth dates exactly as per official government IDs
Save every endorsement that confirms a change

If you want help reviewing your existing term plan and nominee details, you can book a free call with Ditto. We will walk you through the options for your family at no extra cost and with zero spam.

Frequently Asked Questions

How many times can I change my nominee in a term insurance policy?

As long as your policy is active, you can change your nominee and their % share multiple times. Each fresh nomination cancels the previous one, and the insurer will follow the latest nomination.

What happens if my nominee passes away before me?

If your nominee dies while you are alive, the insurer will look at your legal heirs and documents such as a succession certificate. This can delay the payout. It is always safer to file a fresh nomination as soon as you become aware of such a change.

What if my nominee and I die in the same accident?

In that case, the claim amount is paid to your legal heirs, as per succession laws and documents like a will or succession certificate, not to the nominee.

How long does it take for a nominee change to reflect in the policy?

Most insurers take anywhere from a few working days to about two weeks to update a nominee change after you submit all documents correctly. Online requests are processed faster.

Can I have multiple nominees in one term plan?

Yes. Most insurers allow you to list up to 3-4 nominees; you can specify the percentage share for each. The total must be 100%. There is no primary or secondary order. The claim amount is divided as per the shares you have set.

Will the insurer ask extra questions if the nominee is not a first-degree relative?

Yes, they can. If your nominee is a friend, cousin, flatmate, or business partner, the insurer may ask for extra details (relationship, reason), supporting documents, and sometimes a moral hazard declaration to be sure there’s no suspicious motive.

Can the insurer reject my choice of nominee?

Yes, in some edge cases. If the nominee is a non-family person with no clear financial dependence on you, the cover is huge, or your explanations look inconsistent.

Last updated on: 13 Dec, 2025