A term insurance plan is a life insurance policy that extends financial support to your family in your absence. In the event of your death during the policy term, the nominated beneficiary or beneficiaries will receive a death benefit. It can help the family reduce the financial burden to a great extent.
One question that many people have when purchasing a term life insurance plan is whether or not they should include multiple nominees. The answer to this question depends on your dependents and financial goals.
Here are a few things to consider when deciding whether to include multiple nominees in your term insurance plan in India.
Benefits Of Including Multiple Nominees
Including multiple nominees in life insurance can benefit you in certain ways considering your family’s financial condition and dependents in the following ways:
- Sharing the financial benefit – Including multiple nominees in your term insurance can help to distribute the financial responsibility among multiple people, particularly if you have a large family and want to ensure that all of your loved ones are financially protected in the event of your death.
It can be especially important if you have young children or dependents who may not be financially stable yet and may rely on the death benefit from your term plan to support themselves.
By sharing the burden of financial responsibility among multiple term insurance nominees, you can help to ensure that your loved ones are taken care of and have the financial resources they need to live a comfortable and secure life.
- Ensuring that your wishes are followed – If you have specific wishes for how you want your assets to be distributed after your death, including multiple term plan nominees can help to ensure that your wishes are followed.
For example, if you want to leave some of your assets to your spouse who runs a charitable organisation, including your spouse as a nominee in insurance apart from your children can help to ensure that your wishes are carried out.
Choose insurers who have a simple and easy process for the application and claim settlement process. For instance, when you purchase Tata AIA term plans, you can compare and purchase the right product, revise with the required changes timely, apply for claim settlement, etc., online. Therefore, it is a simple and time-saving process.
- Protection against disputes – There can be a scenario wherein your nominee meets with a fatal incident before you or along with you during the policy term. The insurer may need help finding the right legal heir to proceed with the claim settlement process.
Changing the nominee in term insurance at that instant can be a herculean task. It can even lead to disputes between the survivors. Including multiple nominees can prevent such complications and help the dependents receive the right proportion of the death benefit.
Factors To Consider
Although including multiple term insurance nominees can be beneficial in certain ways, there are a few factors that you need to consider.
- Cost – One factor to consider when deciding whether to include multiple nominees in your term plan is the cost. Some insurance companies charge additional fees for including multiple nominees, so you must factor this into your budget when deciding whether it is worth it.
- Complexity – Including multiple nominees can also add complexity to your term plan. You will need to carefully consider the death benefit distribution and ensure that all of your nominees know their responsibilities. It can be especially important if you have young children as nominees, as they may only be able to fully understand their responsibilities once they reach a certain age.
Conclusion
Whether or not you should include multiple nominees in your term plan in India depends on your family and your financial goals. While including multiple nominees can provide additional financial protection for your loved ones, help prevent disputes and help to ensure that your wishes are followed after your death, it can also add complexity and potential cost to your term plan.
Therefore, it is important to carefully consider all the factors involved and consult with a financial advisor or insurance professional to determine the best action for your situation.
