What is Nomination/Assignment of a Policy?
When the policy money becomes due for payment on the death of the policyholder, it can be paid only to that person who is legally entitled to give a valid and effective discharge to the insurer. If the policy bears nomination, the claim is settled in favour of the nominee. Similarly, if the policy is assigned, the assignee receives the claim amount. It should be noted that an assignment of a policy automatically cancels the existing nomination. Hence, when such a policy is reassigned in favour of the policyholder, it is necessary to make fresh nomination.
