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The term “Appointee” is synonymous with the term “Nominee.” Both terms can be used interchangeably. The appointee is basically the nominee, and the nominee can also be referred to as an appointee.
Let us now talk about the role, meaning, and importance of an appointee in insurance.
Let us understand the concept of an appointee with the help of a simple example. Let us assume that Mr. Dastoor has a life insurance policy with SBI Life Insurance. A life insurance policy needs a benefactor.
The appointee acts as the benefactor of a policy. So, Mr. Dastoor decided that the benefactor of his life insurance policy will be his wife, thereby making his wife the appointee of his life insurance policy.
It is a lesser known fact that having an appointee/nominee is not mandatory. That being said, it is absolutely imperative that the policyholder mention an appointee within his policy for streamlining the entire claims disbursement process.
Frequently asked questions about appointees in insurance
No, but it is highly recommended.
Yes. you may add successive appointees in an insurance policy.
Yes, both are the same.
The sum assured will be divided across the legal heirs of the policyholder in the event of no nomination of an appointee.