Nominee Doesn't Have Ownership of Insurance Policy Money: HC

The Lucknow bench of the Allahabad high court has ruled that a beneficial nominee of an insurance policy does not have ownership of the policy's proceeds.

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LUCKNOW:

The court said holding the beneficiary to be a 'beneficial nominee' -- to the exclusion of the legal heirs -- would lead to absurdity, which was never intended when Section 39(7) of the Insurance Act was amended in 2015.

Section 39 (7) provides that a nominee shall beneficially be entitled to the amount payable by the insurer. Prior to the amendment, the nominee of a policy was entitled to hold the amount for the benefit of the successor.