LAHORE: A mother of a deceased policyholder secures her due share out of the policy proceeds. According to details, she had filed an application for issue of succession certificate by maintaining that her son had obtained an insurance policy worth Rs1000000 from State Life Insurance Corporation of Pakistan in his life time. She, being mother (one of the legal heirs) of the deceased was entitled to inherit 1/6th share out of the policy amount.
However, the trial court dismissed the same and directed the insurance company to pay the entire amount to the wife of the deceased being nominee. The wife of the deceased had contended that being nominee she was solely entitled to receive the whole insurance policy amount. The trial court not only agreed with her but also held that the amount of the insurance policy does not fall within the ambit of Tarka.
However, the higher appellate forum made it clear that a nominee is typically defined as a person or entity designated to act on behalf of another, particularly in legal or financial matters. The nominee may hold assets for the benefit of the actual owner, including a fiduciary relationship. It holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.
The forum observed that applying above test on the facts of instant case, it is persuaded to hold that the deceased was not entitled for the benevolent fund and group insurance during his life and such amounts should be deemed to be owned by him on his death and devolve upon his legal heirs as his Tarka.
Also, the policyholder can change the nominee or cancel the nomination at any time before maturity of the policy. In the event of the death of the nominee before the policy matured, the amounts secured by the policy shall be payable to legal heirs of a deceased policyholder, or legal representatives, or the holder of a succession certificate. It is nowhere mentioned that the amount would be disbursed amongst legal heirs or representatives of the nominee after his death.
The forum concluded that a nomination shall not operate as a gift or will in favour of the nominee.
Copyright Business Recorder, 2025
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