Nomination

 1. What is Nomination? Explain the difference between Nomination and Assignment. 

Meaning of Nomination 

 In simple words, nomination refers to a process through which the insured person grants another individual the right to receive the insurance amount upon their death during the policy term. This is done to avoid difficulties in receiving the insurance amount. The person who receives the right to receive the insurance amount is called the Nominee. 

Methods of Nomination 

The main methods of nomination are as follows: 

1. By Proposal Form :-This is the first and most important method of making a nomination. Under this, the person taking the insurance can appoint the nominee by mentioning them in the proposal form. 

2. Mention in the Policy: -This is the second and most important method of making a nomination. Under this The individual purchasing the insurance can appoint a nominee by mentioning them in a letter. 

3.By Endorsement :-Endorsing is the third and most important method of making a nomination. Under this, the individual purchasing the insurance can appoint a nominee by endorsing. 

Changes in Nomination 

The main methods for changing a nomination are as follows: 

1. By Endorsement: -This is the first and most important method for changing a nomination. Under this, the individual purchasing the insurance can change the nomination by endorsing. 

2.By Will: -This is the second and most important method for changing a nomination. Under this, the individual purchasing the insurance can change the nomination by mentioning it in a will. 

Rights of the Nominee 

The main rights of the nominee are as follows: 

1.From the nomination, the nominee  doesn't receives the ownership of the insurance policy

2. The nominated person does not have the right to receive the debt on the policy through nomination. 

3. The nominated person does not have the right to surrender the insurance policy through nomination. 

6. The nominated person does not have the right to grant permission. That is, if the person taking the insurance wants to make any changes in the nomination, then in that case, it is not necessary to obtain permission from the previously nominated person. 

Meaning of Assignment 

 In simple words, assignment refers to a process through which the person taking the insurance policy transfers the right and ownership of the insurance policy to another person. And the person to whom the insurance policy is assigned/transferred is called the assignee. 

It is important to note that nomination can only be done by the person taking the insurance, whereas assignment is always related to the insurance policy itself. 

This can be done by the person who owns it. And another noteworthy point is that nomination can be done even while preparing the proposal letter, whereas assignment can be done even after receiving the insurance policy. 

Objectives of Assignment 

The main objectives of assignment are as follows: 

1. To transfer to another party in exchange for consideration. 

2. To transfer to another party without consideration.

 3. To transfer to another party for debt. 

Method of Assignment 

The main method of assignment is as follows; that is, assignment can be done in the following manner: 

1.Writing an Assignment Deed: 

This is the first and most important method of assignment. Under this, the person getting the insurance done can do the assignment by writing an assignment deed. 

Types of Assignment 

Assignment is of the following two types: 

1.Conditional Assignment:- 

In simple words, conditional assignment refers to an assignment where the person getting the insurance policy assigned does so with some special conditions. 

2. Absolute Assignment :-

In simple words, absolute assignment refers to an assignment where the person getting the insurance policy assigned does so without any conditions. 

Difference between Nomination and Assignment 

The main differences between Nomination and Assignment are as follows: