Even if banks and investment companies have adapted financial products to the needs of millennials in our digital age, the restrictions on whether they can nominate a life partner, same-sex or opposite-sex, remain a gray area.
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 permanent) and safe deposit boxes (including during the lifetime of the account holder). All banks allow the account holder’s parents, spouse, children, or siblings as nominees, but only a handful of life partners as nominees.
Praveen Bhatt, EVP and Head, Retail Liability and Direct Banking Channel, Axis Bank said, “Axis Bank does not restrict any relationship to being a nominee in its individual liability accounts, ie checking accounts, savings accounts, time deposits, etc. A roommate be nominated. ”
However, this is more the exception than the norm.
Banks insist on providing joint home loans to married couples or blood relatives. Residential partners don’t have a lot of ground when applying for loans.
In addition to parents, spouses, and children, some insurance companies also offer their customers the option of choosing cousins and siblings as nominees. However, life partners cannot be named in life insurance policies.
Adhil Shetty, CEO of BankBazaar, an online financial products and credit scoring marketplace, explained why this is so. “If a life partner is nominated, the insurance company cannot confirm the relationship between the insurer and the nominee, so there is no way to match the policy with an advantageous nominee. This leaves the field wide open for litigation between the nominee and the legal heirs, especially if the policyholder dies ex officio. In order to avoid such complications, the insurers therefore prefer not to have any life partners as candidates. ”
First, let’s talk about company health insurance that employers are extending to their employees. These plans, also known as group insurances, are being expanded to protect both employees and their families, taking into account the rising cost of medical expenses. Many IT and financial services companies allow their employees to involve their life partners in order to obtain health insurance benefits.
Family floater policies cover legally recognized relationships. Although cohabitation is not considered illegal, no health policy covers cohabitation, so partners must complete individual health plans.
Live-in partners can be nominated as nominees for mutual fund systems, subject to the submission of certain documents.
“A couple living together must prove that they live together and submit a declaration of kinship in order to make the partner a nominee for the financial product. The same can apply to LGBTQ people, but they cannot submit a marriage because same-sex marriages are not legal in our country. There is always a risk that biological family members will question the rights of the proxy after the person’s death (the will must clearly state that the beneficiary is the beneficiary). In the absence of clear rules to protect the rights of economic nominees, same-sex partners can decide to enter into a business relationship and legally maintain joint accounts. Specialized professional advice is recommended, ”said Raj Khosla, Founder and CEO of MyMoneyMantra.
As there is no formal law on the financial rights of cohabiting couples, a law is required that ensures the right of nomination for cohabiting couples such as legally married couples.
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