Why Regularly Reviewing Your Nomination Details Is Crucial

Life changes as surely as the seasons. What felt right when you first named a nominee for your life insurance may no longer reflect your current circumstances. Regular reviews of your nomination details protect both your wishes and your loved ones’ future.

While it may sound like a hassle, reviewing your life insurance nomination is quite simple and it is very important to ensure a smooth experience for your nominee. Let’s take a deep dive into how to approach this.

The Impact of Major Life Events

Certain milestones call for an immediate nomination update. Some of these are:

• Marriage or Civil Partnership: You may wish to prioritise your spouse.

• Divorce or Legal Separation: You should revoke a former spouse to prevent unintended benefits.

• Birth or Adoption of a Child: Adding your child secures their financial wellbeing.

• Death of an Existing Nominee: Promptly replace a deceased nominee to avoid any legal or familial complications.

• Change in Dependants: A sibling, friend or elderly parent may become your primary dependant.

Each major life event tends to reshape who you can trust to receive and manage your policy proceeds.

Real Life Consequences of Outdated Nominations

Failing to update nominations can derail even the most careful planning. Let’s consider two scenarios to understand this better.

In the first scenario, let’s consider the example of Mr. Rao. He married in 2015 but never updated his policy. His parents remained nominees. When tragedy struck in 2022, Mr. Rao’s widow had to obtain a court order to prove her entitlement. The process took nine months, during which funeral costs and household bills piled up.

In the second scenario, consider Ms. Singh named her elderly parents as nominees in 2010. Both predeceased her in 2018. After Ms. Singh’s passing, the insurer found no living nominee and froze the claim. Her estate executor faced months of paperwork to certify legal heirs.

Through these examples, we can get an idea of how outdated details can cause delays, legal fees and emotional stress.

How to Revise Your Nomination: A Step-By-Step Guide

• Access Your Policy Account: Log in via the insurer’s online portal or app.

• Locate the Nomination Section: Find the dedicated form or option for nominee updates.

• Provide New Nominee Details: Enter full name, relationship, age, and percentage share.

• Attach Supporting Documents: Upload identity and address proof for the new nominee.

• Submit Your Request: Use online submission, email or branch visit according to insurer guidelines.

• Obtain Written Confirmation: Keep the insurer’s acknowledgement letter or email for your records.

Alternatively, you may also do the process offline by reaching out to your life insurance company, filling out the relevant form, and following due process.

How Often Should You Review Your Nominee?

• Annually: Include nomination checks in your yearly financial review.

• After Major Events: Update as necessary following marriage, childbirth, death, or separation.

• Every Five Years: Even without significant changes, periodic reviews guard against oversight.

Regular intervals safeguard against forgotten policies and paper-based errors. Don’t forget to inform your nominees of any changes as and when you make them!

Emotional and Practical Benefits

• Peace of Mind: You know your wishes will be honoured exactly as you intend.

• Financial Security for Loved Ones: A valid, up-to-date nomination speeds up claim settlement.

• Reduced Family Strain: Fewer disputes and less paperwork ease the burden on survivors.

• Demonstrated Care: Regular reviews show your loved ones you remain mindful of their welfare.

By taking these simple steps, you protect not only the financial future of those you care about but also their emotional wellbeing during a difficult time.

Life evolves continually. By reviewing your nomination details regularly – especially after key life events – you ensure your life insurance policy reflects your true priorities and removes potential hurdles for your loved ones when they need support most.