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Why To Have Multiple Nominees In Your Term Plan Nominees could be any family member/members such as a mother, father, son, daughter, or spouse; in a few cases, it could also be your aunt, uncle or nephew/niece

By Rakesh Goyal

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Before starting with this topic, let us understand who the nominees are and who should ideally be your nominee for your term insurance plan. Nominees are appointed persons decided by the insured while buying any insurance plan, which means that the insurance proceeds would be paid (by the insurer) to the nominee in case of any unprecedented situations. Note that it is mandatory to add the name of the nominee while one is opting for a term insurance plan to ensure that the payout would be released to someone on your behalf in your absence. Nominees could be any family member/members such as a mother, father, son, daughter, or spouse; in a few cases, it could also be your aunt, uncle or nephew/niece.

Now let us comprehend why having multiple nominees for your term insurance plan is necessary instead of having one. We often strive days and nights to offer the best to our family by boosting our income source, investing in the right places, saving as much as possible and trying to do the best we can to ensure a stress-free future for our family. We do the best possible to support our family, and their needs and not allow them to compromise on their dreams.

But have you ever wondered what would happen to your family in your absence? How would they meet their financial needs, especially if you are the family's sole breadwinner? Who would take care of your child/children's higher education, marriage expenses, monthly bills, medical emergencies, etc., if something terrible happens tomorrow? This is why it is also required to make informed decisions to secure your family's future even when you are not around them.

With your demise, there might come a whole stack of unavoidable worries. It is frequently stated that funds can be the leading cause of broken families. Even though this isn't true for everybody, it is better to take preventive measures to avoid a situation like this.

Here are some key reasons you should nominate your family member in your term plan, not one but multiple members.

Ensure interest of all the family members

It is highly advisable to mention multiple nominees in your plan to ensure that the interests of all family members are guarded and that there are no later disagreements within the family. It ensures that all the mentioned nominees get the financial benefits of the plans and no one is left upset. In addition, do not forget to specify the distribution percentage of the payout amount among the nominees. It would further save the quarrel of 'Whom Should Get How Much.'

Rare situations (both policyholder and nominee demise at the same time)

Policyholders frequently appoint a single nominee in the faith that they will safeguard the entire family's interests. However, this can be true when the policyholder names their partner as the nominee. But under unusual circumstances, there are chances that this turns out to be an expensive error if the nominee also passes away at the same time as the policyholder. Moreover, it can be all the more challenging if the payout is needed for more than one dependent. As a consequence of appointing a single nominee, the claim settlement process could be daunting and incredibly complex, as the insurer may find it challenging to recognize the insured's legal heir who would ultimately receive the insurance coverage.


The nomination process is usually complicated but is essential for safeguarding the insured's family's interests. Selecting only one nominee without giving it a thorough thought could be a common mistake made by many. This might miss out on the deserving individuals who might require the money at the most and are very dear to you. Hence, always ensure to add more than one nominee by understanding the family's needs. Also, never miss to share the following details with your nominee beforehand - policy information, policy papers and the different benefits that they might get in case of your demise. Besides that, the policy and nominee information should be regularly reviewed, and any adjustments should be reported to the insurance company.

Rakesh Goyal

Director of Probus Insurance

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