As per Section 39 in The Insurance Act, 1938, Nomination is a right to the insured to appoint a person/s to receive the policy moneys in the event of the claim by the insured’s death.
Nomination can be effected by the life assured only and not by any other title holder or beneficiary of the policy.
Types of Nominations:
There are three types of nomination:
1. Single Nomination
2. Joint/ multiple nomination
3. Successive or alternative nomination
Successive Nomination: This type of nomination will provide the option to appoint more than one nominee in successive manner (not as multiple nominees). After expiry of life assured, first nomination will become operative. At that time, if first nominee is not alive, then only the second nomination will become operative. If 1st and 2nd nominees are not alive, then only third nomination will become operative. Other eventualities like marriage, divorce of first nominee, etc will not make the successive nomination operational. Successive Nomination can be done by using (LIC Form No. 5194-Rev) for Single Life or (LIC Form No. 5194-Rev-Joint-Life) for Joint Life policies.
If life assured appoints any minor nominee as successive nominee, then appointment of Appointee to receive the money secured by the policy, in the event of the Assured’s death during the minority of the nominee will be necessary.
You can also change successive nomination by LIC Form – Change of Successive Nomination.
Who is entitled to receive the Death Claim benefit?
The claim monies can be paid to any of the following:
1. Assignee, incase policy has been assigned or
2. Nominee or
3. Legal Heirs, incase of open title case (i.e. open title is absence of valid nomination or assignment in policy) or rival claimant case or
4. Appointee, incase the nominee is a minor