Can A Minor Be A Nominee In Life Insurance?

In a future where you may no longer be around to support your loved ones, you rely on measures such as life insurance to help them regain a sense of financial security. The nominee of your life insurance plan is the one you hope will receive your policy benefits, which may help them and your loved ones be at financial ease.

But what if your life insurance nominee is a minor; most likely, your child? Do you trust them to handle the amount in a responsible manner? Moreover, are they mature enough to handle such a responsibility? Most importantly, are you allowed to nominate a minor for your life insurance policy.

The concern of a parent or guardian regarding the future of the little one in their life is fully valid and recognised by insurance authorities in the country. Hence, not only are you allowed to nominate a minor, but there are also provisions in life insurance nomination to appoint a guardian in the policy alongside the minor nominee.

Let’s take a closer look at nomination of minors for life insurance and the regulations that fortify this provision.

Minor Life Insurance Nominees and Guardians

Neither is it advisable nor allowed for minors to be taking charge of such sums of money by themselves. For them to be able to benefit from the policy proceeds, the policyholder ought to appoint a reliable guardian to take care of this amount for them

Trustee Role


The guardian acts as a trustee. They hold and manage the claim amount solely for the minor’s benefit until the child turns 18 years of age.

Appointment and Status


You, as the policyholder, select the guardian. Note that this choice does not automatically make them a legal heir. Their duty is limited to caring for the nominee’s funds.

What Happens if the Guardian Dies Before the Nominee Turns 18?

Should the guardian pass away before the minor comes of age, the insurer cannot hand over funds directly to the child. In this scenario, here are the possibilities that will need to be explored.

Identifying the Legal Guardian


The insurer will ask for proof of guardianship. A surviving parent or court‐appointed guardian may step in as the new appointee.

Court Involvement


If no clear guardian emerges, the insurer may require a court order appointing a guardian. This process can delay release of funds.

Policyholder’s Precaution


To avoid such complications, review and update your nomination periodically—especially after major life events like marriage, birth, or bereavement.

Can the Guardian Use the Funds for Emergencies?

The guardian or guardian’s access to the nominee’s funds is not unrestricted. Their guiding principle is the child’s welfare.

Permissible Uses


They may deploy funds for urgent needs, such as schooling, medical treatment or basic living expenses.

Record-Keeping


The appointee must maintain clear records of all disbursements.

Legal Safeguards


For large sums or contested claims, the insurer – or a court – may demand an affidavit or order authorising specific expenditures. This ensures transparency and prevents misuse.

Best Practices for Policyholders

In the case that you must make a minor your nominee, you need to be careful and measured. It is important to follow certain practices to ensure smooth nomination. Here are a few you can refer to:

Select Wisely


Choose a guardian who is trustworthy, financially responsible and willing to take on this duty.

Communicate Clearly


Discuss the role and responsibilities with your guardian. Ensure they understand the need for prudent management and record-keeping.

Review Regularly


Life changes—such as marriage, relocation or the appointee’s own health—can affect suitability. Update your nomination and guardian as needed.

Supplement with a Will or Letter


Consider drafting a will or side letter. Clearly outline how you intend the funds to be used. This document can guide the guardian and reassure all parties.

 

Nominating a minor in your life insurance policy safeguards your child’s future. By appointing a reliable trustee and understanding what happens if the guardian can’t serve, you ensure the claim proceeds deliver the intended support.

Regular reviews and clear communication are vital. With these measures in place, you can rest assured that, should the need arise, your child’s financial security remains protected.