Articles May 6, 2021

Life insurance provides financial security to your family in case of your death. But to avail this benefit of life insurance, you need to appoint a person who would receive the same. It is important to appoint/update the nominee under the policy to avoid disputes. A nominee can be anyone to whom you want to give a valid discharge of the policy benefits in case of your death during the policy term. As per Section 39 of the Insurance Act 1938, as amended by the Insurance Act, 2015, you may nominate the person or persons to whom you want to make the nominee. Read this page further and know the details of section 39 of the insurance act.

Details Regarding Section 39 of the Insurance Act

  1. You should nominate the person or persons to whom the policy benefit shall be paid in the event of your death at inception or any time before the policy matures. In case any nominee is a minor, you need to appoint an appointee who will receive the money in the event of your death during the minority of the nominee.
  2. Any nomination shall be in effect if it is mentioned in the policy document and registered in the records of the insurer. Your nomination can be canceled or changed as per your choice if you send it in writing to the insurer.
  3. The insurer shall furnish a written acknowledgment of the registered nomination, cancellation, or change.
  4. A transfer or assignment of a policy will be made as per section 38, and it shall automatically cancel a nomination.
  5. the policyholder or his/her /her legal heir/representatives will receive the policy proceeds upon the death of nominees before maturity.
  6. If the nominee/s survive till the policy maturity, they will receive their share of the amount secured under the policy.
  7. If you nominate your parents, spouse, children, or any of them, the nominee/s shall be entitled to the amount payable to you unless it is proved that you could not have conferred any such beneficial title on the nominee
  8.  If the nominee/s die after the policyholder but before their share of the amount secured under the policy is paid, their share will be payable to the heirs or legal representative
  9. The provisions of sub-sections 7 and 8 shall operate to destroy or impede the right of any creditor to be paid out of the proceeds of any life insurance policy
  10. The provisions of sub-sections 7 and 8 shall apply to all life insurance policies maturing for payment after the commencement of the Insurance Laws (Amendment) Act, 2015.
  11. If you die after the maturity date but the proceeds and benefit of the policy have not been paid to you,the nominee/s will be entitled to such benefits.
  12. The provisions of section 39 of the insurance act shall not apply to any policy where section 6 of the Married Women’s Property Act, 1874, applies/applied.

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