Page 41 - IC24 LEGAL ASPECTS OF LIFE ASSURANCE

company will give Rs 10 lakh to the Bank and the remaining

amount to the legal heirs of Vijay in case of his death.

What is the difference between Assignment and Nomination?

The nomination is the right given to the policyholder to appoint

a trustworthy person, who is entitled to receive the

policyproceeds of the life insurancein case of death of the

policyholder. The person appointed by the policyholder is

known as the nominee. The basic difference between a

nomination and assignment is that while in nomination, the

nominee will have no right on the benefits of life insurance

policy if the policyholder is alive and is simply the receiver of

the policy benefits in case of death.The nominee is liable to

transfer the same to the legal heirs. On the other hand, in the

assignment clause, the assignee has full right on the benefits of

the life insurance even if the policyholder is alive. This happens