How to Change the nominee in LIC Policy ? When a person buys a Life insurance policy, he has to name someone as a nominee.
Who is a Nominee in a Life Insurance Policy?
The nominee is the person who would receive the death benefit if the policyholder dies within the policy period. So the nominee is a very important component of a life insurance policy. The nominee is selected by the policyholder alone and he/she has the freedom to select whoever she/she wants to. The nominee can be changed in the course of the policy and this can be done multiple times.
Process to change Nominee in an LIC Policy:
LIC of India being such a giant insurance organization has a specific defined rule for each and every financial or non-financial transaction. The rest of the players in the industry usually follows LIC’s methodology for everything.
After you receive the original LIC Policy Bond, you need to check if the name of the nominee you had mentioned has been spelt correctly else the nominee will have a difficult time to get the claim, whenever needed. One may also choose to change the nominee name or percentage at any point of time by following the simple steps mentioned below.
Steps to Change Nominee in an LIC Policy:
- The nomination of an LIC Policy can only be changed in the home branch, i.e. in the branch where the policy had been initially taken and services the policy. Thus, to change the nominee, one needs to visit the home branch only.
- The change or cancellation of nomination of an LIC policy can happen ONLY via writing as it is an instruction to LIC to discharge the money in absence of the life insured
- The change in nomination of an LIC policy happens as an endorsement to the original policy bond which needs to be attached to the original policy bond and kept securely
- An endorsement is a notification to the Life Insurance Corporation of India, LIC which is registered in its records and duly stamped, without which the change in nomination is not applicable.
Points to keep in mind while doing a Nomination for an LIC Policy:
- The nomination can be done in favour of any family member who will take care of the welfare of the family in the absence of the life insured.
- The nomination cannot be done in favour of a stranger or someone not related to the life insured as there is no insurable interest between the two and the possibility of moral hazard would be considered high.
- If the nominee is a minor, the signature of an appointee, his guardian, is mandatory on the nomination form
- Under Joint Life policy, nomination has to be a joint one without which it is considered invalid
- Nomination needs to be name specific and cannot be written as “Spouse”, “Wife” or “children”. Their specific names and percentages need to be clearly mentioned on the form
- Nomination is not allowed for non individual policies, even HUF funds
- Successive nomination is allowed in LIC of India.