LIFE INSURANCE: Insurance Act does not restrict nomination of siblings in policy

I have a life insurance policy in my name. I am a bachelor and I want nominate my younger brother as legal heir. In event of my death the policy monies should be paid to my brother. I have every right to nominate in my blood relations. My parents are very old. But the insurance company is asking me why I am not nominating my parents instead of brother? They also said that I cannot nominate my brother as long as my parents are alive. Can the company force me to do so?—M Khira

Nomination of an Insurance Policy is governed by Section 39 of the Insurance Act, 1938. Considering the section does not have an explicit restriction, the policyholder may nominate his siblings under an insurance policy. However insurers may have different practices so to ensure the principle of insurable interest is complied.

I have been investing in a Ulip since 2008. I want some money for a relative's wedding. Can I withdraw from my Ulip without discontinuing the policy? Will I have to pay charges or any tax if I withdraw?—Kamal Rai

Considering your situation, you can make a partial withdrawal from your Ulip policy to the extent of the amount you are eligible for. This will not only help you manage your expenses but also continue your policy with all the benefits. While this withdrawal will not be taxed, I will recommend that you refer to your policy document for any applicable charges.

The writer is MD & CEO, Edelweiss Tokio Life Insurance