Even as banks and investment firms have revamped financial products to meet the needs of millennials in the digital age, restrictions on who can name a resident partner, whether same-sex or opposite-sex , remain a gray area.
A proxy has the right to access the account holder’s bank accounts and is entitled to money deposited in savings accounts, deposits (fixed and recurring) and bank lockers (even during the account holder’s lifetime) . All banks allow parents, spouse, children or siblings of the account holder to be nominated, but only a handful allow resident partners to be nominated.
Praveen Bhatt, Executive Vice President and Head of Retail Liabilities and Direct Banking Channel, Axis Bank, said: “Axis Bank does not limit any relationship to be eligible to be a candidate in its individual liability accounts, it is i.e. current accounts, savings accounts, term deposits, etc. Live-in-partner may be a candidate in such accounts.
However, this is more of an exception than a norm.
Banks insist on giving joint home loans to married couples or blood relatives. Resident partners do not hold much ground when applying for loans.
Besides parents, spouse and children, some insurance companies also allow their customers to choose cousins and siblings as applicants. However, resident partners cannot be named in life insurance policies.
Adhil Shetty, CEO of BankBazaar, an online marketplace for financial products and credit score checking, explained why this is so. “In the event that a resident partner is appointed as agent, the insurance company cannot in any way confirm the relationship between the insurer and the agent, so there is no way to assign a beneficiary agent to the police. This leaves the field free for legal disputes between the agent and the legal heirs, especially if the insured dies intestate. So, to avoid such complications, insurers prefer not to have resident partners as agents.
Let’s first talk about the corporate health insurance that employers extend to their employees. Also called group health insurance policies, these plans are extended to protect both 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 resident partners for health insurance benefits.
Family float policies cover legally recognized relationships. Although cohabiting relationships are not considered illegal, no health policy covers cohabiting relationships, requiring partners to subscribe to individual health plans.
Resident partners can be nominated as candidates for mutual fund schemes subject to the presentation of certain documents.
“A resident couple must provide proof of cohabitation and submit a relationship declaration to make the partner a candidate for the financial product. The same may apply to LGBTQ people, but they cannot provide proof of marriage as same-sex marriages are not legal in our country. There is always a risk that biological family members will challenge the nominee’s rights after the person’s death (the will must clearly state that the nominee is the beneficiary). In the absence of clear rules protecting the rights of beneficial owners, same-sex partners may choose to enter into a business relationship and legally hold joint accounts. Specialized professional advice is recommended,” said Raj Khosla, Founder and Managing Director of MyMoneyMantra.
Considering that there is no official statute regarding the financial rights of resident couples, it is necessary to have a law in place that can guarantee nomination rights to resident couples as legally married couples.
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