Insurance Nominees Don't Override Legal Heirs: Section 39 of Insurance Act Must Yield to Succession Laws

The HC ruled that amendments to Section 39 of the Insurance Act, 1938, particularly subsections (7) and (8), do not override succession laws. Despite language suggesting nominees receive "beneficial interest," the Court determined that such provisions must be interpreted within the Act's scheme and do not create a parallel succession law. The Court established that when legal heirs make claims, nominee rights must yield to personal succession laws. In this case, the appellant-nominee (mother of the deceased) could not claim absolute ownership over insurance benefits because other Class-I heirs (widow and minor son) had valid claims under Hindu Succession Act. The Court dismissed the appeal, confirming that in contested cases, personal succession law prevails over nomination provisions. .....

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