Introduction
When it comes to insurance policies, one of the most frequently asked questions is whether it is possible to change the name of the insured person during the policy term. This question is especially relevant when it comes to Unit Linked Insurance Plans (ULIPs), which have gained a lot of popularity in recent years. ULIP is a type of insurance product that offers both investment and insurance benefits. They provide policyholders with the option of investing in various funds and also offer life cover. In this article, we will explore whether it is possible to change the insured person’s name in ULIPs during the policy term.
Understanding ULIPs
Before we delve into the question at hand, let’s take a moment to understand ULIPs better. As mentioned earlier, ULIPs are insurance products that offer investment and insurance benefits. They work by investing a portion of the premium in various funds such as equity, debt, and hybrid funds. The remaining premium is used to provide life cover. ULIPs come with a lock-in period, during which the policyholder cannot withdraw the invested amount. At the end of the lock-in period, the policyholder can either withdraw the amount or continue investing in the funds.
Can you change the insured person’s name in ULIPs during the policy term?
Now let’s address the question at hand. Can you change the insured person’s name in ULIP plan during the policy term? The short answer is no. Once the policy is issued, the name of the insured person cannot be changed. This is because the insurance company has underwritten the policy based on the original insured person’s details, and any changes to these details could affect the policy’s terms and conditions. It is essential to note that this applies to all insurance policies, not just ULIPs.
What if you need to change the insured person’s name?
If you need to change the insured person’s name, the only option is to surrender the policy and take a new one with the correct details. However, surrendering the policy before the lock-in period ends could result in significant losses. This is because ULIPs charge a surrender fee, and the policyholder may also have to pay taxes on the gains earned so far. Therefore, surrendering a policy should only be done after careful consideration of the costs and benefits.
What if the insured person passes away?
If the insured person passes away during the policy term, the nominee can claim the policy’s benefits. However, it is essential to ensure that the nominee’s details are correctly recorded in the policy documents. If there are any errors in the nominee’s details, it could result in delays in the claim settlement process.
Conclusion
In conclusion, changing the insured person’s name in ULIPs during the policy term is not possible. It is essential to ensure that all details are correctly recorded at the time of policy issuance to avoid any issues later. If you need to change the insured person’s name, surrendering the policy and taking a new one with the correct details is the only option. However, this should be done after careful consideration of the costs, premiums by using ULIP calculator and benefits. It is also crucial to ensure that the nominee’s details are correctly recorded to avoid any issues in the future.
FAQs
- What is a ULIP?
A ULIP is an insurance product that offers both investment and insurance benefits. It works by investing a portion of the premium in various funds and providing life cover with the remaining amount.
- What if I need to change the insured person’s name in ULIPs?
If you need to change the insured person’s name, the only option is to surrender the policy and take a new one with the correct details. However, surrendering the policy before the lock-in period ends could result in significant losses.
- What is the lock-in period in ULIPs?
The lock-in period in ULIPs is a specific time period during which the policyholder cannot withdraw the invested amount. The duration of the lock-in period varies depending on the policy and can range from five to fifteen years.
- What happens if the nominee’s details are incorrect in the policy documents?
If the nominee’s details are incorrect in the policy documents, it could result in delays in the claim settlement process. Therefore, it is essential to ensure that all details are correctly recorded at the time of policy issuance.
