Insurance Gyan: Appointee in an Insurance Policy

An appointee in an insurance policy acts as a temporary custodian, typically when the main beneficiary (the nominee) is a minor. Here's a breakdown:

• Nominee: The person designated to receive the insurance payout in case of the policyholder's death.
• Appointee: Someone you choose to hold the insurance benefit amount until the nominee reaches adulthood.

Why is an appointee needed?

Since minors can't legally handle large sums of money, the insurance company won't release the funds directly to them. The appointee bridges this gap by:

• Receiving the claim payout on behalf of the minor.
• Managing the money responsibly until the minor reaches legal age (usually 18).
• Ideally, using the funds for the minor's well-being (education, upbringing, etc.).

Who can be an appointee?

• A trusted adult, often a spouse, parent, or close relative.
• Someone responsible and capable of managing finances.

Remember:

• The appointee doesn't inherit the money. They simply hold it in trust for the minor.
• You can update the appointee information in your policy if needed.