Skip to main content

Nomination in a Life Insurance policy

Nomination is a right conferred by the section 39 of the Insurance Act 1938, on the “holder of a policy of life assurance on his own life” to appoint a person/s to receive the policy moneys in the event of the policy becoming a claim by the assured’s death. The term “holder of a policy” ordinarily means a proposer or life assured or an absolute Assignee who has right, title & interest in the policy. But if the holder of the policy is not life assured himself, he cannot effect a valid nomination under the policy. In other words, if holder of the policy is life assured, then only he can effect valid nomination under the policy. In other cases, where proposer and life assured are different persons i.e. policies taken during minority of life assured OR policies taken by father on major child, nomination is not allowed. In case policy is absolutely assigned in favour of assignee, though he is a holder of the policy, Assignee cannot effect valid nomination under the policy. This is because, he is not life assured under the policy.

Leave a Reply

Your email address will not be published. Required fields are marked *