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Where a nominee under a life policy is a minor, Section 39 provides that:
A{'text': 'The nomination is invalid', 'letter': 'A'}
B{'text': 'The insurer must pay the nominee on majority', 'letter': 'B'}
C{'text': 'The Central Government becomes the trustee', 'letter': 'C'}
D{'text': "The policyholder may appoint a person to receive money during the nominee's minority", 'letter': 'D'}
Answer & Solution
Correct answer: D. {'text': "The policyholder may appoint a person to receive money during the nominee's minority", 'letter': 'D'}
1. Sec 39 provides a special arrangement when the nominee is below age of majority.
2. The policyholder retains the right to appoint a substitute receiver until majority.
3. It shall be lawful for the policyholder to appoint any person in the manner laid down by the insurer, to receive the money.
_Source: Insurance Act 1938 (incorporating amendments till 2021), noc.irdai.gov.in — "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."_