New Delhi, April 13 -- In the complex world of asset distribution, the rights of nominees, particularly in life insurance policies, have been a subject of ongoing legal debate. Traditionally, nominees have been regarded as trustees, holding the proceeds of an insurance policy temporarily for the rightful legal heirs. However, a significant shift occurred with the 2015 amendment to the Insurance Act, 1938, which granted beneficial rights to certain close family members, including parents, spouses and children nominated by a policyholder.

Despite this change in India's insurance law, the legal landscape surrounding nominee rights remains fraught with ambiguity, as highlighted by a recent Karnataka high court ruling that challenges the scop...