New Enroll in our GIC Finance Online Course Here!

    Register

    Question

    What are the requirements for a nomination made by a

    policyholder to be effective, and how can it be changed according to the Insurance Act?
    A A nomination must be mentioned only in the policyholder’s will and can be changed any time before the policy matures Correct Answer Incorrect Answer
    B A nomination must be incorporated in the text of the policy itself or made by an endorsement on the policy, communicated to the insurer, and registered in the insurer's records. It can be cancelled or changed by an endorsement, further endorsement, or a will, but the insurer must receive written notice of any such change or cancellation to be liable Correct Answer Incorrect Answer
    C A nomination becomes effective automatically when the policy is issued and cannot be changed Correct Answer Incorrect Answer
    D A nomination must be registered with the insurer but does not require any written communication or notice for changes Correct Answer Incorrect Answer
    E A nomination must be filed with a government registry to be considered valid, and changes must also be registered with the government. Correct Answer Incorrect Answer

    Solution

    Section 39. Nomination by policyholder(2) Any such nomination in order to be effectual shall, unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy and any such nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement or a further endorsement or a will, as the case may be, but unless notice in writing of any such cancellation or change has been delivered to the insurer, the insurer shall not be liable for any payment under the policy made bona fide by him to a nominee mentioned in the text of the policy or registered in records of the insurer.

    Practice Next

    Relevant for Exams: