When you buy a life insurance policy, naming a nominee—usually a spouse—is mandatory. In most cases, if the policyholder passes away, the insurance company pays the claim amount to the nominee (husband or wife). However, complications arise if both the policyholder and nominee die simultaneously, such as in an accident. What happens to the insurance money then? Let’s break down IRDAI’s rules and legal procedures in such scenarios.

What Happens If Both Policyholder and Nominee Die?

In tragic incidents like the recent Ahmedabad plane crash, where entire families perished, there were cases where both the policyholder and nominee died. According to the Insurance Regulatory and Development Authority of India (IRDAI), if both die in the same event, insurers may assume the nominee died after the policyholder. This means the nominee’s legal heirs can claim the insurance money.

Who Can Claim the Insurance Amount?

Experts state that if the nominee is also deceased, their legal heirs become eligible to file a claim. The insurance company verifies documents and proofs of relationship before releasing the payment.

Understanding Legal Heirs Under Hindu Succession Act

Indian inheritance laws classify legal heirs into two categories:

  1. Class I Legal Heirs – Includes spouse, children, and mother. If the children are deceased, grandchildren can claim the amount.

  2. Class II Legal Heirs – If no Class I heirs exist, the claim passes to the father, siblings, nephews, or nieces.

Key Takeaways for Policyholders

  • Always keep nominee details updated.

  • If no nominee exists, the claim goes to legal heirs as per succession laws.

  • Insurance companies may require additional documentation in case of dual deaths.

Fact Check:

  • IRDAI guidelines confirm that nominees act as trustees, and legal heirs ultimately hold the right to claims.

  • Courts have upheld that nominees do not automatically become owners; the money goes to the deceased’s legal heirs.

By understanding these rules, policyholders can ensure their family’s financial security even in unforeseen circumstances. If you have a life insurance policy, review your nominee details today to avoid complications later.