Barun Ojha, as a bachelor, took a life policy "Poorna Suraksha" from ABC Life and named his father Tarun as his nominee. During the tenure of the policy, he married Sujata Jha, but he did not change the nomination in his

CS Professional · Insurance - Law and Practice · PYQS · December 2020
Barun Ojha, as a bachelor, took a life policy "Poorna Suraksha" from ABC Life and named his father Tarun as his nominee. During the tenure of the policy, he married Sujata Jha, but he did not change the nomination in his policy. Subsequently, Barun died of a heart attack when the policy was still in force. His wife Sujata lodged a claim with the insurance company; simultaneously Barun's father Tarun also filed a claim as the official nominee of the deceased. Insurance company found the claim under the policy justified but does not want a confrontation with the two parties staking the claim, as they do not want to take any risk of being questioned for the wrong payment from their behalf if they make payment to any one of them. They wanted that both the parties should amicably settle the issue off the court or get it settled through a legal process before it can make any payment to any one of them. What do you mean by Nomination?

Answer & Explanation:

Nomination of Life Insurance Policies is a process whereby if the Life Insured dies within the policy tenure, the Insurer would pay out the proceeds of that policy to the Nominee. The process of selecting that candidate or Nominee is called Nomination. The policy holder has to select a nominee to the life insurance policy at the time of purchase. It works similar to a nominee whom a bank account holder should appoint to receive the money in the bank account in case of the account holder's death.

Topics: Life Insurance

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