Nomination by policy-holder
Section 39 of the Insurance Act, 1938 deals with nomination by policy-holder. The holder of a policy of life insurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death: Provided that, where any nominee is a minor, i The Act came into force on 01 Jul 1939.
1[39. Nomination by policyholder. --(1) The holder of a policy of life insurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death:
Provided that, where any nominee is a minor, it shall be lawful for the policyholder to appoint any person in the manner laid down by the insurer, to receive the money secured by the policy in the event of his death during the minority of the nominee.
(2) Any such nomination in order to be effectual shall, unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy and any such nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement or a further endorsement or a will, as the case may be, but unless notice in writing of any such cancellation or change has been delivered to the insurer, the insurer shall not be liable for any payment under the policy made bona fide by him to a nominee mentioned in the text of the policy or registered in records of the insurer.
(3) The insurer shall furnish to the policyholder a written acknowledgement of having registered a nomination or a cancellation or change thereof, and may charge such fee as may be specified by regulations for registering such cancellation or change.
(4) A transfer or assignment of a policy made in accordance with section 38 shall automatically cancel a nomination:
Provided that the assignment of a policy to the insurer who bears the risk on the policy at the time of the assignment, in consideration of a loan granted by that insurer on the security of the policy within its surrender value, or its reassignment on repayment of the loan shall not cancel a nomination, but shall affect the rights of the nominee only to the extent of the insurer's interest in the policy:
Provided further that the transfer or assignment of a policy, whether wholly or in part, in consideration of a loan advanced by the transferee or assignee to the policyholder, shall not cancel the nomination but shall affect the rights of the nominee only to the extent of the interest of the transferee or assignee, as the case may be, in the policy:
Provided also that the nomination, which has been automatically cancelled consequent upon the transfer or assignment, the same nomination shall stand automatically revived when the policy is reassigned by the assignee or retransferred by the transferee in favour of the policyholder on repayment of loan other than on a security of policy to the insurer.
(5) Where the policy matures for payment during the lifetime of the person whose life is insured or where the nominee or, if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the policyholder or his heirs or legal representatives or the holder of a succession certificate, as the case may be.
(6) Where the nominee or if there are more nominees than one, a nominee or nominees survive the person whose life is insured, the amount secured by the policy shall be payable to such survivor or survivors.
(7) Subject to the other provisions of this section, where the holder of a policy of insurance on his own life nominates his parents, or his spouse, or his children, or his spouse and children, or any of them, the nominee or nominees shall be beneficially entitled to the amount payable by the insurer to him or them under sub-section (6) unless it is proved that the holder of the policy, having regard to the nature of his title to the policy, could not have conferred any such beneficial title on the nominee.
(8) Subject as aforesaid, where the nominee, or if there are more nominees than one, a nominee or nominees, to whom sub-section (7) applies, die after the person whose life is insured but before the amount secured by the policy is paid, the amount secured by the policy, or so much of the amount secured by the policy as represents the share of the nominee or nominees so dying (as the case may be), shall be payable to the heirs or legal representatives of the nominee or nominees or the holder of a succession certificate, as the case may be, and they shall be beneficially entitled to such amount.
(9) Nothing in sub-sections (7) and (8) shall operate to destroy or impede the right of any creditor to be paid out of the proceeds of any policy of life insurance.
(10) The provisions of sub-sections (7) and (8) shall apply to all policies of life insurance maturing for payment after the commencement of the Insurance Laws (Amendment) Act, 2015 (5 of 2015).
(11) Where a policyholder dies after the maturity of the policy but the proceeds and benefit of his policy has not been made to him because of his death, in such a case, his nominee shall be entitled to the proceeds and benefit of his policy.
(12) The provisions of this section shall not apply to any policy of life insurance to which section 6 of the Married Women's Property Act, 1874 (3 of 1874), applies or has at any time applied:
Provided that where a nomination made whether before or after the commencement of the Insurance Laws (Amendment) Act, 2015 (5 of 2015), in favour of the wife of the person who has insured his life or of his wife and children or any of them is expressed, whether or not on the face of the policy, as being made under this section, the said section 6 shall be deemed not to apply or not to have applied to the policy.]
Section 39, The Insurance Act, 1938 (Act 4 of 1938).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Lic of India vs Insure Policy Plus Services Pvt. LTD
Court's Decision & Legal Precedent
Section 38 of the Insurance Act 1938 is a mandatory substantive provision that grants absolute rights to assign life insurance policies. Once an assignment is effected in compliance with the prescribed procedure (endorsement or separate instrument signed by assignor and attested by witness, with notice delivered to insurer), the insurer is bound to accept and record the transfer. An insurer cannot refuse valid assignments through administrative circulars or policy decisions, as such refusal would exceed delegated powers and violate the statutory mandate. Life insurance policies are transferable property and actionable claims within the meaning of the Transfer of Property Act, not mere social security measures precluding assignment. The requirement of insurable interest applies only at the inception of the policy, not at the time of subsequent assignment or transfer.
On this section: Cited to show that transfer made in accordance with Section 38 automatically cancels nomination, evidencing the mandatory character of Section 38.
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Uma Bhattacharjee & Ors. v. Achintya Ranjan Bhattacharjee & Ors.
Court's Decision & Legal Precedent
DATE-VERIFIED Final Order 2015-02-12 (order-3.pdf; body 'Date of hearing & delivery of Judgment & order : 12.02.2015' matches index): bank-deposit nomination under s.45ZA (language parallel to Insurance Act s.39 / Savings Certificates) entitles the nominee to receive/withdraw the deposit for a valid bank discharge, but does not confer beneficial title — the amount remains the deceased's estate and must be distributed to legal heirs (or legatees) under succession law; nominee Mallika held only her 1/42 share among seven heir-sets.
On this section: s.39 Nomination by policy-holder — used as controlling construction (Sarbati Devi) that nomination ≠ beneficial title / not a statutory testament; applied to parallel bank-deposit nomination.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
3 instruments name this provision in its title or its text without being made under it.
- Insurance Regulatory and Development Authority of India (Protection of Policyholders' Interests) Regulations, 2017Regulation 2017
- Insurance Regulatory and Development Authority of India (Fee for registering Cancellation or Change of Nomination) Regulations, 2015Regulation 2015
- Insurance Regulatory and Development Authority of India (Fee for registering, cancellation or change of Nomination) Regulations, 2015Regulation 2015
Questions about Section 39
What have the courts held on Section 39 of the Insurance Act?
Lic of India vs Insure Policy Plus Services Pvt. LTD (29 Dec 2015) is the leading judgment on this section among those set out below: Cited to show that transfer made in accordance with Section 38 automatically cancels nomination, evidencing the mandatory character of Section 38. Another 1 judgment on this section is set out below, 1 of them from the Supreme Court.
How do I find court cases under Section 39 of the Insurance Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Insurance Act 1938 39, section 39 Insurance Act 1938, section 39 of the Insurance Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Lic of India vs Insure Policy Plus Services Pvt. LTD (29 Dec 2015).
What should I read with Section 39 of the Insurance Act, and has it changed?
Its own text turns on section 6 (Requirements as to capital), section 38 (Assignment and transfer of insurance policies), Married Women's Property Act 6 (Insurance by husband for benefit of wife), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it. 3 instruments name it without being made under it, most recently Insurance Regulatory and Development Authority of India (Protection of Policyholders' Interests) Regulations, 2017 (2017), then Insurance Regulatory and Development Authority of India (Fee for registering Cancellation or Change of Nomination) Regulations, 2015 (2015).
When did Section 39 of the Insurance Act come into force?
Section 39 of the Insurance Act, cited as Insurance Act 1938 39, came into force on 01 Jul 1939, having been enacted on 26 Feb 1938. It is in force as at the date shown on this page.
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Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.