A revocable nomination is a common type of nomination for insurance policies these days. The policyholder will still hold on to the rights of the policy and living proceeds (like critical illness or total permanent disability benefit) will be paid out to the policyholder. Only in the event of death, the death benefit will be paid out to the nominees specified.
With a nomination, the claimant is able to claim for the insurance proceeds even before the Grant of Probate or the Grant of Letters of Administration is issued. This will be helpful to tide over immediate financial matters while waiting for the Court’s approval for Grant of Probate or Grant of Letters of Administration.
What If I Have A Will?
A Will and a Nomination are 2 separate instruments for estate distribution. That said, we want to avoid circumstances that may lead to dispute especially if the distribution indicated on the Will and Nomination is different. If you have decided to make nominations for your Insurance Policies, when writing your Will, you may also wish to state for proceeds from your insurance policies to be distributed to the person(s) nominated.