Nominee under insurance law has only a right to collect policy money; heirs retain beneficial entitlement.

A nomination under section 39 of the Insurance Act, 1938 gives the nominee only a right to receive and collect insurance proceeds from the insurer. It does not confer any beneficial, proprietary, or title interest in the policy money, because the policyholder retains ownership of the policy during life and the proceeds remain part of the deceased assured's estate. Accordingly, where the policyholder dies, the legal heirs or legal representatives are the rightful claimants to the insurance money, and the nominee cannot assert ownership in his own right.

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Issues: Whether a nominee named under section 39 of the Insurance Act, 1938 acquires any right, title or interest in the policy money, or whether the amount remains payable to the legal heirs of the deceased policy-holder.

Analysis: Section 39 was construed as distinguishing a nomination from an assignment. The provision was read to mean that the nominee is entitled only to receive and collect the policy moneys from the insurer, while the policy-holder retains the beneficial interest during his lifetime. The power to assign or transfer the policy, and the fact that the money remains payable to the policy-holder or his heirs where the policy matures or the nominee does not survive, were treated as inconsistent with any proprietary right in the nominee. The amount secured under the policy was held to form part of the deceased policy-holder's estate.

Conclusion: The nominee has no title to the insurance money in his own right and the legal heirs of the deceased policy-holder are the rightful claimants.

Ratio Decidendi: A nomination under section 39 of the Insurance Act, 1938 confers only a bare right to receive the policy money and does not create any beneficial or proprietary interest in the nominee; the proceeds remain part of the assured's estate and pass to the heirs or legal representatives.

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