ChatGPT said:
A nominee in insurance is the person designated by the policyholder to receive the insurance benefits or claim proceeds in case of the policyholder’s death. Nominees are commonly named in life insurance policies but can also apply to some other insurance types.
✅ Simple Definition
A nominee is the person who will receive the insurance payout if the insured event (like death) occurs.
✅ Key Points About Nominees
- Nominee is not the owner of the policy
- They only receive the benefits.
- The policyholder retains ownership and control during their lifetime.
- Multiple Nominees Allowed
- You can name more than one nominee and specify their share (e.g., 50% and 50%).
- Can Be Changed
- Policyholders can update or change the nominee anytime during the policy term.
- Legal Heir vs Nominee
- Nominee is not automatically a legal heir, but they receive the insurance proceeds.
- After receiving the payout, the nominee may have to distribute it according to the will or inheritance laws.
- Required for Claims
- In life insurance, claims cannot be settled without a nominee.
✅ Example
- You buy a life insurance policy for ₹10 lakh.
- You name your spouse as the nominee.
- In case of your death, the insurance company pays ₹10 lakh to your spouse.
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