The Long Read
Everything you *need to know* is right above this. Scroll down, only if you'd still like to read more (honestly, why?)
Simple! The person mentioned in your Will will receive your insurance money. Let’s understand with an example:
If the nominee in your policy is your mother but in your Will, you have mentioned that your father is entitled to receive the insurance payout, then the insurer will pay out this money to your mother but your father can still claim it. .
But there is an exception to this - if in your policy you had checked for the MWPA provision, then only your wife and children will get the insurance money. In this case, the nominee mentioned in your Will (if different from your wife or children) will not get the insurance money.
It will help in the case of a dispute between your insurance nominee and the person you actually want to provide the insurance payout to.
The Will will bypass any nominee and it will ensure that the person mentioned in the Will will get the insurance payout.
There is an exception to this though. If in your policy you had checked for the MWPA provision, then only your wife and children will get the insurance money.
In this case, the nominee mentioned in your Will (if different than your wife or children) will not get the insurance money.
Your nominee should be someone with insurable interest in you i.e. they will be financially impacted by your death. You will need to prove this insurable interest to your insurer. This can be easily done if you have a blood/legal relationship with your nominee.
So your nominee can be:
A family member (parents/spouse/children)
A business partner
Remember, if you want to make your minor child a nominee, you need to mention a legal guardian/assignee in your term plan.