Life Insurance Assignment and Nomination

Life insurance assignment and nomination are two important concepts related to life insurance policies. Let me explain both of them in detail:

1. Assignment:

Life insurance assignment refers to the transfer of ownership of a life insurance policy from the policyholder to another person or entity. The person who transfers the policy is known as the assignor, while the person who receives the policy is known as the assignee.

The assignee then becomes the new owner of the policy and is responsible for paying the premiums and receiving the benefits upon the death of the insured. The assignor can either transfer the policy completely or partially, depending on their wishes.

2. Nomination:

Life insurance nomination is the process of appointing a person or entity to receive the death benefit in case of the insured's death. The nominee can be anyone, such as a family member, friend, or a trust. The nominee does not become the owner of the policy but only receives the death benefit upon the death of the insured.

The policyholder can nominate multiple nominees, and the percentage of the death benefit can be allocated among them. The policyholder can also change the nomination at any time during the policy term.

It is important to note that nomination and assignment are not the same. In nomination, the nominee only receives the death benefit, while in assignment, the assignee becomes the new owner of the policy.

Life Insurance Surrender Value Principle Explained

An attorney may be the proprietor of the policy both on the survival of the life assured, or 611 his death according to the terms of the transfer.

The life programs are the only programs, which can be assigned whether the attorney has an insurable interest or not.

Insurable Interest in Life Insurance

A nomination can be canceled before maturity, but unless notice is given of any similar cancellation to the insurer, the insurer won't be liable for any “ bona fide ” payment to a designee registered in the records.

When the policy matures, or if the designee dies, the sum shall be paid to the policy- holder or his legal representatives.