Section 39 of IA : Section 39: Nomination By Policy-Holder

Explanation using Example

Imagine John, a 40-year-old software engineer, purchases a life insurance policy. He wants to ensure that in the event of his untimely death, his wife, Mary, receives the money to support herself and their children. John uses Section 39 of the Insurance Act, 1938, to nominate Mary as the beneficiary of his life insurance policy.

John fills out the nomination form provided by his insurer and submits it, making the nomination official. The insurer acknowledges this nomination and registers it in their records. A few years later, John and Mary have another child, and John decides to add this child as an additional nominee. He contacts the insurer, completes the necessary endorsement to include the child as a nominee, and the insurer registers this change.

Unfortunately, John passes away unexpectedly. Because of the nomination he made under Section 39, the insurer pays out the policy's proceeds directly to Mary, as the surviving nominee, without any legal complications. This provides the financial support John intended for his family after his death.