Personal Finance: Nominating live-in partner for financial products

Updated on Jun 14, 2021 01:38 AM IST

A nominee has the right to access the account holder’s bank accounts and is entitled to the money deposited in the savings accounts, deposits (both fixed and recurring) and bank lockers (even while the account holder is alive) .

Banks insist on granting joint home loans to married couples or blood relatives. Live-in partners do not hold much ground while applying for loans.
Banks insist on granting joint home loans to married couples or blood relatives. Live-in partners do not hold much ground while applying for loans.
ByAbeer Ray

MUMBAI

Even as banks and investment companies have revamped financial products to suit the needs of millennials in our digital age, the restrictions on whether they can nominate a live-in partner, whether same sex or opposite sex, remains a gray area.

Bank accounts

A nominee has the right to access the account holder’s bank accounts and is entitled to the money deposited in the savings accounts, deposits (both fixed and recurring) and bank lockers (even while the account holder is alive). All banks allow the account holder’s parents, spouse, children or siblings to be nominees, but only a handful permit live-in partners to be nominees.

Praveen Bhatt, EVP and head, retail liabilities and direct banking channel, Axis Bank said, “Axis Bank does not restrict any relationship to be eligible for being a nominee in its individual liability accounts, i.e., current accounts, savings accounts, term deposits, etc. Live-in-partner can be a nominee in such accounts.”

However, this is more exception than norm.

Banks insist on granting joint home loans to married couples or blood relatives. Live-in partners do not hold much ground while applying for loans.

Insurance policies

Besides parents, spouse, and children, some insurance companies also allow their clients to choose cousins and siblings as nominees. However, live-in partners cannot be nominated in life insurance policies.

Adhil Shetty, CEO, BankBazaar, an online marketplace for financial products and check the credit score explained why this is so. “In case a live-in partner is made a nominee, there is no way the insurance company can confirm the relationship between the insurer and the nominee, so there is no way of assigning a beneficial nominee to the policy. This leaves the field wide open for legal disputes between the nominee and the legal heirs especially if the policyholder dies intestate. So, to avoid such complications, the insurers prefer not to have live-in partners as nominees.”

Health insurance

Let us first talk about corporate health insurance that employers extend to their employees. Also called group mediclaim policies, these plans are extended to protect both the employees and their families keeping in mind the rising costs of medical expenses. Many IT and financial services companies allow their employees to include their live-in partners to avail health insurance benefits.

Family floater policies cover legally recognised relationships. Though live-in relationships are not deemed illegal, no health policy covers live-in relationships thus necessitating partners to go for individual health plans.

Mutual funds

Live-in partners can be made nominees to mutual fund schemes subject to the submission of certain documents.

“A live-in couple needs to provide proof of cohabitation and submit a declaration of relationship for making the partner a nominee for the financial product. The same may apply to LGBTQ persons as well, but they can’t provide proof of marriage as same-sex marriages are not legal in our country. There always is a risk of biological family members challenging the rights of the nominee after the demise of the person (the will must make it clear that the nominee is the beneficiary). In the absence of clear rules protecting beneficial nominee rights, same sex partners may choose to enter a business relationship and hold joint accounts legally. Specialized professional advice is recommended,” said Raj Khosla, founder and managing director, MyMoneyMantra.

Considering there is no formal statute regarding the financial rights of live-in couples, there is a need to have a law in place that can ensure nomination rights to live-in couples like legally married couples.

Personal Finance is a weekly feature that aims to provide our readers pertinent and helpful financial information.

SHARE THIS ARTICLE ON
Close Story
QUICKREADS

Less time to read?

Try Quickreads

  • Dr Sunil Sanon with the Khadi national flag presented to him by the Jaiprakash Agarwal family who got it from Mahatma Gandhi in 1946 during his visit to Mussoorie. (HT Photo)

    Tricolour gifted by Mahatma Gandhi preserved with utmost care by Mussoorie duo

    It has not been a matter of concern for a doctor duo, who has made it a point to preserve the Khadi Tricolour that was gifted to them by a Delhi-based family, which was passed down to them directly from Mahatma Gandhi. The prized gift became part of their lives when they were Gandhi's ardent followers and instrumental in conducting his prayer meetings whenever he visited Mussoorie.

  • Bihar chief minister Nitish Kumar reminded Bima Bharti that she was twice made a minister “though she does not know how to speak and read”. (HT File/Santosh Kumar)

    ‘Sack minister or I quit’: JDU MLA’s public message to Nitish Kumar. He responds

    Janata Dal-United (JDU) legislator Bima Bharti on Thursday threatened to resign from the assembly and the party if chief minister Nitish Kumar doesn't drop food minister Leshi Singh from his cabinet, saying she was involved in extortion, murder and anti-party activities. She also blamed Leshi Singh for the defeat of her daughter in the district board elections. Bima Bharti represents Rupauli assembly segment; Leshi Singh is the legislator from the adjoining seat, Dhamdaha.

  • Finally, the kid turned the corner and went his way. The couple settled down to take a well-deserved break. My heart went out to these parents who like most human parents had no idea about parenting skills but only an intuition to guide them at being good parents. (HT Photo)

    Parenting: An intuitive skill in all creations

    The toughest job on earth is parenting. Despite there being tomes written about the skill, parenting is mostly intuitive. But at the end of the day, you are responsible for the physical, emotional and mental development of your child. For most parents, parenting is also about providing a safe environment for children. We go out of the way to protect our little ones.

  • Available at domestic arrival, this facility can be availed at hourly basis at the Chennai airport.

    Sleepzo: Now, you can take a quick nap at this Indian airport | Details here

    In its bid to make transit travelers more comfortable while waiting for their flights, the Chennai airport has launched its sleeping facility called 'Sleepzo'. The Airports Authority of India shared information about these sleeping capsules come with various amenities. Available at domestic arrival, this facility can be availed on an hourly basis at the Chennai airport. The video tweeted by Airports Authority of India shows compact, four sleeping pods being inaugurated.

  • Deputy CM said the Delhi government was clueless over developments in the Rohingyas reported resettlement. (File image)

    ‘If not AAP or Centre...’: Sisodia writes to Amit Shah on Rohingyas row

    Delhi deputy chief minister Manish Sisodia on Thursday wrote to union home minister Amit Shah urging him to clarify the Centre's stand on Rohingya refugees in the national Capital and sought action against officials in the central and Delhi government for “secretly planning” to shift them to flats in outer Delhi locality.

SHARE
Story Saved
×
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, August 18, 2022
Start 15 Days Free Trial Subscribe Now