Report No. 66
8.40. Assignment stating on different footing.-
So much as regards a nomination in a policy. The result of this discussion is, that a nomination confers on the nominee only a right to collect the amount, and confers no title. An assignment of a policy, on the other hand, stands on a different footing. Under section 38(5) of the Insurance Act, 1938, the effect of an assignment is that the assignee is the only person entitled to benefit under the policy, and such a person shall also be subject to all liabilities and equities to which the assignor was subject at the date of assignment. But a "nomination", as already state1 and as appears from section 39(1) of the Insurance Act, merely means that the person nominated is the one to whom moneys payable under the policy shall be paid in the event of the death of the assured.
Unlike an assignment-which is irrevocable-a nomination may, at any time before the policy matures for payment, be cancelled or changed. In the event of the policy maturing during the lifetime of the assured, the nomination will have no effect and the policy money will, in that event, be payable to the assured. It follows that while an assignee is not merely entitled to receive but has a right to the policy-money itself, a nominee is no more than a person who is competent to receive the money if the assured did not survive the maturity of the policy. He has no title to the money due under the policy.
1. Para. 8.37, supra.