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What is the difference between nomination and assignment?
Nomination is an authorization to receive the claim arising out of policy in the event of the death of the life assured, it does not give the nominee an absolute right over the money received to the exclusion of other legal heirs. Further, the Nomination can be changed or cancelled at any time during the lifetime of the policyholder at his will and pleasure or by a subsequent assignment. On the other hand, assignment of an insurance policy is a transfer or assignment of all rights and liabilities to the insurance policy in favour of the assignee. Is the return of premium option worth considering if you are buying term insurance? How? Return of premium option in Term insurance plans offer to return the total premiums paid during the term of the policy to the life assured in the event if he/ she outlives the plan. This is like buying sugar coated medicines. The cost of term insurance pinches during the life of the insured. The benefit of term insurance can only be realized by the survivors in case of the life assured%u2019s death. The return of premium option satisfies only psychologically that my money is not going to waste. Whereas I strongly recommend that a without return of premium term insurance is a better option. One can either get a higher coverage in the same premium or same coverage can be bought at a lesser premium. The premium thus saved can be invested in any other investment avenue, which will generate a much better maturity benefit.
Answer by Amit Suri Source :- The Economic Times |
