search icon

Beshak Insurance dictionary

search icon
Nominee (Family Member)
Term Life Insurance

It works similarly to the nominee on bank accounts or other financial instruments.

When you buy a policy, you are required to name a family member or a closed one, who will be responsible to collect the claim payout in case of your death. This person responsible to collect the claim payout in case of your death is called a nominee.

Nominees can be appointed when buying the policy or anytime during the policy term.

A nominee is not active unless:

  1. Mentioned in the text of the policy.
  2. A separate endorsement is issued and registered by the insurer. The insurer has issued a written acknowledgment.

You can have multiple nominees for a policy.

Nomination can be canceled or changed by an endorsement or a will - but needs to be registered with the insurer.

The assignment will cancel nomination - except when the assignment is for a loan where the nomination would only be reduced by the amount of the loan provided. The nomination will again become active for this amount when the loan is repaid.

Nominee Vs Legal Heir

Nominees are not necessarily beneficiaries of the claims payout. As per law, they are merely caretakers or custodians of the money. They are supposed to disburse the money to the legal heirs as per the succession laws or the will of the deceased person.


  1. Death of nominee before the death of the person insured: The claim payout as applicable will be paid to the legal heir of the person insured.
  2. In the case of multiple nominees, if there are nominees that survive the person covered under the policy - then the claim will be paid to the surviving nominees.
  3. Death of nominee after the death of the person insured but before the claim payout is made. The claim payout will be paid to the legal heir of the nominee.

Creditors have a right to the claim amount, before nominees.