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Report No. 82

II. The Case Law

2.2. Section 39(6), Insurance Act.-

For our purpose, it is sub-section (6) of section 39 of the Insurance Act,1 that is material. The effect of that sub-section is that where the nominee, or if there are more nominees than one, a nominee or nominee, survive the person whose life is insured, the amount assured by the policy shall be payable to such survivor or survivors. This provision does not, however, lay down whether, on the money being paid to the nominee thereunder, the nominee becomes the beneficial owner thereof, or whether the money shall form part of the estate of the insured person so that his heirs (or the legatees mentioned in that regard in the Will, as the case may be), have any claims thereon.

There is considerable case law on the subject, to which a detailed reference will be made in later paragraphs. For the present, it will be sufficient to say that there is a conflict of decision.- though not very formidabl.- on the subject. One view2 is that section 39(6) of the Insurance Act confers on the nominee merely the right to receive the insurance money as between the insurance company and the nominee, but it does not provide for the title or ownership of the money. The second view3 regards the nominees not as a mere recipient of the money but also as the beneficial owner thereof.

1. Para. 2.1, supra.

2. Paras. 3.3 to 3.6, infra.

3. Paras. 2.10 to 2.11, infra.

Effect of Nomination under Section 39 of the Insurance Act, 1938 Back

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