Life Insurance (3)
The life insurance policyholder has a legal right to appoint a person or persons to receive the policy benefits in the event of death of the life insured. Any policyholder, who is a major and the life insured under a policy, can make a nomination.
A nominee is the person designated by the policyholder to receive the proceeds of an insurance policy, upon the death of the insured.
Yes. A policyholder who is the life assured can change the nomination of the policy at any time till the maturity date. All insurance companies will have a designated form that will need completion and sent to the Insurer for notifying the change in nomination to be registered.
Nomination is an authorisation to receive the policy benefits in the event of death of the life assured. A nomination does not give the nominee an absolute right over the money received to the exclusion of other legal heirs, who may continue to have a legal and valid claim over the money so received by the nominee.
Nomination can be revoked or cancelled at any time by the policyholder at his/her will or by a subsequent assignment.
On the other hand, Assignment of an insurance policy is a legally valid and enforceable transfer or assignment of all the rights in the insurance policy by the policyholder in favour of the assignee.