Life insurance companies had unclaimed amounts of about Rs 22,237 crore at the beginning of the financial year 2023-24. In this regard, a six-month special campaign was run by the companies from June to November. This helped reduce the unclaimed amount to a little over Rs 1,018 crore. This has been said in a report of the insurance regulator. The initiative highlighted proper estate planning for policyholders to benefit non-relatives. Since, insurance companies take a cautious approach in nominating nominees who are not close relatives of the policyholder. Life Insurance Corporation of India (LIC) has advised policyholders to nominate a close relative. This policy presents challenges for people in same-sex relationships or those who are not close relatives
Instructed to regularly update contact, bank and nominee information as well as carry out KYC and re-KYC, use credit bureaus and media to trace consumers and hold agents accountable for accurate information Has gone. Despite these guidelines being in place, unclaimed funds often increase. As such, lack of awareness, change in family circumstances or circumstances where the nominee is not alive may not be detected.
Experts are saying this is a problem that needs to be solved as an industry. Insurance companies are actively contacting enrollees to keep them informed about policy details, benefits and any changes. The policy also provides for HPV vaccination to promote the prevention of term cancer. It was noted by experts that difficulties are faced when the nearest relatives are not chosen as nominees by the insured. Having a non-relative as a nominee creates ethical hazards. But an exception is allowed in cases where there is no blood relation to the nominee. If a non-profit nominee is appointed, the legal heirs will retain ownership of the fund, Edelweiss Life said in a blog. But while same-sex couples can nominate their partners, nomination does not give them ownership of the money.
Cautious attitude of insurance companies towards non-family nominees
Insurance companies take a cautious approach towards non-family nominees, warning that if there is a non-relative nominee, the legal heirs may claim the maturity amount. If a non-profit nominee is appointed, the legal heirs will retain ownership of the fund, Edelweiss Life said in a blog. While same-sex couples can nominate their partners, nomination does not give them ownership of the money. LIC has advised policyholders to nominate a close relative. This policy presents challenges for people in same-sex relationships or those who are not close relatives
