[Solved] Which of the following is TRUE regarding the rights of a nominee under a life insurance policy? — Ans: If the nominee is spouse, child, or parent, they become the beneficial owner of... | Insurance Awareness

Insurance Awareness - Life Insurance - LIC

Which of the following is TRUE regarding the rights of a nominee under a life insurance policy?

ANominee always becomes the legal owner of the policy proceeds

BNominee can surrender the policy during the policyholder's lifetime

CIf the nominee is spouse, child, or parent, they become the beneficial owner of policy proceeds

DNominee can assign the policy without policyholder consent

Step-by-Step Solution

Step 1: Identify the type of nominee under law
Section 39 of the Insurance Act (amended in 2015) introduced the concept of a beneficial nominee.
Step 2: Apply the beneficial nominee rule
If the nominee is the spouse, child, or parent of the policyholder, they become the beneficial owner of the policy proceeds.
Final Answer:
If the nominee is spouse, child, or parent, they become the beneficial owner of policy proceeds → Option C
Quick Check:
Close family nominee = beneficial owner, not just a trustee.

Quick Trick: Close family nominee = beneficial owner.

Common Mistakes:

MISTAKES

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