4 min read
Buying a life insurance policy means you are securing the future of your family. The best thing about term life insurance is that it comes with maturity benefits. And if the policyholder passes away within the policy tenure, the nominee of the policy will get the death benefit. Either way, the policy gives something to the policyholder and his/her loved ones. However, if you buy a life insurance policy and if the need arises for it, you can also choose to transfer your policy. Yes, you read the totally right! Please read on to know how.
Although many policyholders are not aware of this, transferring your life insurance policy to someone else is very much possible. As you are transferring your life insurance policy, you also transfer title, rights, and interest.
One of the most common reasons for transferring a life insurance policy to some other person is to provide security for a loan. In one such case, the borrower assign allocates the policy to the lender. And in this case, the lender is called the assignee. As the life insurance policy is transferred, the assignee receives all the benefits from the policy.
To know the actual steps of transferring your life insurance policy to someone else, you have to contact your life insurance provider. Every life insurance company has its own set of procedures. Nevertheless, here is a general step-by-step guide mentioned below that will give you an idea about it.
Although it may vary from one insurance company to the other, some of the common documents that are mostly asked by all insurance providers are mentioned herein below:
The reason for transferring insurance policies can be many. Here are some of them mentioned below:
The income tax payout due to the death of the policyholder is exempted from any kind of income tax to be levied on the amount. In case, the policy is surrendered by the policyholder, the cash payout of the policy will incur tax that is payable. In such cases, transferring the policy may allow the policyholder to receive the cash payout without burdening themselves with paying additional income tax.
An income tax policy can be used by the policyholder as collateral for securing a loan from a bank. While the bank may need traditional collateral such as real estate or investments, in lack of these an income tax policy can be used as collateral for a loan. As a term of the bank offering the loan, the income tax policy may be transferred to the name of the bank. In case the policyholder dies before the loan is completely paid off, the insurance payout for the death would be first paid to the bank which can then use it to close the loan by paying off the outstanding loan amount. After that, the remaining amount would be transferred to the nominee of the life insurance policy.
Another reason to transfer a life insurance policy could be that you are in urgent and dire need of money. By transferring the policy to someone else, you give away the rights to make changes to the policy that would usually be reserved for the policy owner.
An insurance policy is a real asset that can help you a lot in securing your and your family’s financial future. You can head to the website of your insurance provider to find more details about how can you make the most of your existing policy by transferring it to someone else.
Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.
View this post on Instagram
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
Deaths Which Are Not Covered Under Term Insurance Term life insurance secures the family of the insured financially in case of unfortunate demise of the.
Term Life Insurance vs Traditional Life Insurance Policy - What are the Major Differences If you are confused between a term insurance and a traditional.
A home loan makes buying your dream house a reality. But it does not come without a major implicit risk - that of inability to.
Non-Linked Non-Participating Term Insurance Plan - Detailed Guide If you know about term plans, you may have heard about the non-linked and non-participating term insurance.
Tele Medical Checkup for Term Insurance The pandemic has changed the very basic way we used to operate in our day-to-day lives. Remote work has.
Things You Can Do When Your Term Insurance Policy Expires A term insurance plan provides monetary security to a family in the absence of the.
Term Insurance Surgical Care Benefit Rider Riders in term insurance are designed to enhance the coverage of the policy and of course provide additional benefit.
Speak to our advisor
Corporate Office : Mahindra Insurance Brokers Ltd ( A Mahindra Group Company ) Sadhana House, Ground Floor, 570 P. B. Marg, Behind Mahindra Towers, Worli, Mumbai 400018.
Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).
Insurance is the subject matter of solicitation.
For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.
Copyright © 2022 Mahindra Insurance Brokers. All Right Reserved.