Friend's family waited 14 months for ₹75 lakh term payout – avoid this mistake

[Yamini]

Someone I know went through a situation most people don't realise can happen. The father had a ₹75 lakh term insurance policy and had named his wife as nominee. She died in 2022, but he never changed the nomination. He passed away eight months later. Their two teenage kids approached the insurer, who said 'no valid nominee on record, we can't pay directly'. The children had to go to civil court, obtain a Succession Certificate, and then come back to the insurer – a process that took 14 months and cost ₹85,000 in legal fees. Two grieving teens had to navigate the courts. The fix would have taken just 15 minutes online. The legal reason: Section 39 of the Insurance Act 1938 states that if your nominee dies before you and you don't name a new one, the nomination becomes void. Even if you had named your spouse as a Beneficial Nominee under the 2015 amendment, that protection only lasts while they are alive. Three things you should do right now: 1. Log in to your insurer's portal and check who your current nominee is. 2. If that person is deceased or no longer your intended beneficiary – update it today (free, takes 15 minutes). 3. Add an alternate/contingent nominee if your insurer allows it.

[Hemant]

Thanks for the information.

[Vaishali]

Good post. You can also add multiple nominees.

[Ranjit]

Just curious – if Person A holds the policy and Persons B and C are nominees, and Person C passes away, but A never updates the nomination (should have added Person D). Then A dies. Person D has all the login details for A's policy (A had shared them just in case). Can Person D simply log in and change the nominee to themselves?

[Harry]

Thanks for the heads‑up! It's a small step but very important.

[Meera]

This isn't just for term insurance; it also applies to bank savings accounts.

[Larry]

Thank you for taking the time to share this experience; it's really helpful.

[Monica]

Just in case, what happens if both husband and wife (the nominees) die together in an accident? Is there any rule for that?