Aholder of a policy of life insurance may nominate one or more persons to whom the money secured by the policy shall be paid in the event of his death. This provision that is Section 39 of Insurance Act, 1938 raises various kinds of issues and ambiguities such as the position of the nominee as a beneficial nominee or a collector nominee, the position in case a policy is taken under Married Women Property Act, 1874 (MWP Act) and the debate dealing with the delivery of the policy money to the nominee amounting to complete discharge of the insurers liability. To resolve this conflict of interest between the nominees, the heirs and the insurer there have been various recommendations to amend the said provision.
This article basically analyzes the present law relating to nomination by a policyholder of a life insurance policy, the recommendations and its feasibility. A contract being an agreement is enforceable by law, the parties to it must perform their respective promises. That is the principle mode of discharge of the contract. In a contract of life insurance, the insurer promises to pay the sum assured to the insured, to his executors, administrators or assignees. Where the insured, who is the other party to the contract, is dead, the claimant will be required to furnish satisfactory proof of his title to the sum assured, such as a succession certificate or letter of administration, etc. |
