Am I the Beneficiary of a Life Insurance Policy? How to Find Out?

There are often surprises in life, some of which are concealed in the most unlikely places. Being a nominee for a life insurance policy can be one of these unexpected ones. How do you find out, though, if you are the one whose name appears there? This was what happened in Sridar's life.

An old life insurance policy caught Sridar's attention as he was going through his late grandmother's belongings. Could I benefit from this policy? Sridar began to question. Have you ever come across something that made you pause and question what you know about your family’s plans? Maybe a forgotten letter, a cryptic note, or even an old document like Sridar’s? How would you even begin to find out if you are named in a life insurance policy?

Sridar went on a quest driven by his curiosity. If he was the beneficiary, he wanted to know what to do to find out. Along the way, he learnt a lot and consulted family members and the insurance firm. Let’s see what he found out. Keep reading!

What Are Beneficiaries?

A beneficiary is a person or an organisation that is assigned to receive insurance policy benefits or assured death benefits. Put simply, it's someone you have a financial interest in and who you trust. A friend, relative, or even an organisation could qualify as this. But here's some interesting information for you to know. It is possible to designate a beneficiary that is not even a person or entity, such as a bank.

What Is A Beneficiary For Life Insurance, And Who Qualifies?

A beneficiary is the person or organisation designated to receive the death benefit from your life insurance policy. The good news is that you can choose to choose one or many beneficiaries as you see fit.

So, who qualifies? Almost anybody can be named as a beneficiary, provided they are legally recognised. This means you can choose individuals, trusts, charities, or even minors.

What Happens To Life Insurance With No Beneficiary?

The death benefit from a life insurance policy often becomes a part of the deceased's estate if the insured dies without designating a beneficiary. It then moves on to the probate procedure, which can be costly and time-consuming. Regretfully, this implies that the allocation of assets may not accurately represent the intentions of the departed. Also, disagreements about how the money should be divided among family members or other parties may arise in the event that there is no designated beneficiary.

How Do You Prove You Are A Beneficiary?

Here's what you generally need to do -

Show Your ID:

First, you will need to provide proof of your identity and your relationship to the deceased.

Present The Paperwork:

Next, you must submit any documentation that confirms your status. This includes a copy of the insured's will or other relevant papers that name you as a beneficiary.

Get In Touch With The Insurer:

Finally, you can reach out to the life insurance company with all the necessary documents to confirm your status officially.

How To Find Out If You Are The Beneficiary Of A Life Insurance Policy?

Here’s how to find out if you are the beneficiary of a policy -

Ask the Policy Owner:

If the policy owner is still alive, the easiest way to check is to ask them directly if you are named as a beneficiary.

Examine Financial Documents:

Take a look through the deceased’s financial records. You can check documents either in safe deposit boxes or filing cabinets.

Contact The Life Insurance Company:

If you think you might be a beneficiary, get in touch with the life insurance company. They can confirm if your name is on the policy.

Consult A Lawyer:

If you still have difficulty finding the policy or figuring out your beneficiary status, seeking legal advice can provide guidance and assistance.

Do Life Insurance Companies Notify Beneficiaries?

Life insurance companies don’t always take the initiative to notify beneficiaries. Instead, it usually falls on the beneficiaries to contact the insurer and file a claim. So, if you think you are a beneficiary, it is a good idea to stay informed and proactive.

Do Beneficiaries Have To Pay Tax On Life Insurance Policies?

In India, the good news is that the death benefit from a life insurance policy is usually exempt from income tax under Section 10(10D)** of the Income Tax Act, 1961. However, this exemption applies as long as the policy fulfils specific conditions.

Wrapping Up

Sridar’s experience serves as a reminder of the value of research and curiosity when handling loved ones' estate finances. Sridar discovered his possible beneficiary status and gained important insights about handling such shocks by speaking with family members and the insurance provider. His experience reminds us that chances can often be found in the most unlikely locations.