The Policyholder should be advised for nomination, if no nomination was effected. When nomination or assignment is effected by a policyholder, it should be scrutinized thoroughly to see whether it was in order or not. If there is any material omission or mistake, it may be returned to the policyholder or the assignee with a covering letter giving instructions as to the corrections to be made in the assignment or nomination. When a document is sent for correction, reminders should be sent every fortnight until the requirements are complied with. The policyholder should follow the instructions printed on the back of assignment or nomination.
Nomination is the process of identifying a person to receive the policy money in the event of the death of the Policyholder. Nomination can be done at the beginning of the Policy by giving details of nominee in the proposal form. However, if the nomination is not given at the beginning, the policyholder can give it at a later date. For that purpose a prescribed form is to be filled up and nomination can be endorsed on Policy Bond.
Change in Nomination: Change of nomination can be done by the policy holder any time during the term of the policy and any number of times he wants to. Procedure of nomination is same every time.
Withdrawal of nomination: Nomination can be withdrawn by the policy holder without giving prior notice to the nominee. Nomination can be done only by a policyholder who has attained majority and on a policy on his life. Under Nomination, the Nominee gets only the right to receive the policy money in the event of the death of the Policyholder.
Death of the Nominee: If the nominee dies and the policyholder is still surviving then the nomination would be ineffective. If Nominee dies after the death of the Policyholder but before receiving policy money, then also Nomination becomes ineffective and only the legal heirs of the policyholder can claim money.
Nomination at a later date: After the policy is prepared and issued and if no Nomination has been given the assured can give the nomination only by an endorsement on the policy itself. A nomination is not required to be stamped. Nomination in favour of a stranger cannot be given as there is no insurable interest involved in that case. For nomination in favour of wife and children, specific names of wife and children should be given.
Successive nominee: Where it is mentioned in nomination that the policy money should be paid to “Nominee A failing him to Nominee B whom failing to Nominee C, etc.”, such nomination is called successive nomination. Such nomination would be in favour of one individual in the order mentioned. All such Nomination would mean that if Nominee A were dead at the time in question the Nominee B would take the whole amount and that if both Nominees A and B were then dead then Nominee C would take the whole amount and so on.
A Minor Nominee: In view of the Insurance (Amendment Act) 1950, the Life Assured has the right, where a nominee is a minor, to appoint any person as the Appointee to receive the moneys secured by the policy in the event of the assureds’ death during minority of the nominee. The person so appointed will not be a guardian of the minor Nominee’s power will be limited to the right to receive the policy money in the event of the assureds’ death during the minority of the Nominee. The appointment must be a major. The appointment of Appointee must be communicated to the insurance company. So his name can be registered with the company. The appointment can be cancelled or changed by the life assured any time before the maturity of the policy.