Life insurance nomination confers no vested interest; policy proceeds remain part of the deceased's estate and may satisfy creditors.

A nominee under a life insurance policy acquires no present or vested interest during the policy-holder's lifetime because nomination under the Insurance Act is only a power to receive payment on death, unlike assignment which transfers the assured's interest inter vivos. The policy-holder retains title and control, including the ability to cancel or change the nomination, so the nominee is merely authorised to collect the proceeds. On that basis, the policy amount payable on the insured's death forms part of the deceased's estate and may be reached by creditors. The nominee may be impleaded as a legal representative for execution purposes.

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Issues: Whether the nominee under a life insurance policy acquires any present or vested interest in the policy during the lifetime of the policy-holder, and whether the policy amount payable to the nominee forms part of the estate of the deceased policy-holder so as to be available to his creditors.

Analysis: Section 2(11) of the Insurance Act, 1938 recognises life insurance business as a contract upon human life, and Section 38 shows that assignment of a policy operates as a transfer of the assured's interest inter vivos. Section 39, however, confers only a power of nomination and does not transfer the assured's interest to the nominee during the assured's lifetime. The power to cancel, change, or revoke a nomination, including by will, indicates that the nominee acquires no vested right while the policy-holder is alive. The provisions relating to maturity during the life of the assured and survival of nominees also show that the policy-holder retains title and interest until death, and that the nominee is merely the person authorised to receive payment on death.

Conclusion: The nominee under Section 39 acquires no interest in the policy during the lifetime of the policy-holder, and the policy proceeds form part of the deceased policy-holder's estate. The creditors of the deceased policy-holder may therefore proceed against the amount payable under the policy, and the nominees can be impleaded as legal representatives.

Final Conclusion: The revision succeeded and the nominees were treated as legal representatives for execution purposes because the insurance money remained part of the deceased debtor's estate.

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