New Delhi, March 31 -- Mr. A took a prudent step in his twenties-he bought a term life insurance policy and named his mother as the nominee. Years later, he got married and had a child but never updated his nomination. When he passed away unexpectedly, a critical question arose: Who has the rightful claim to the insurance payout-his mother, whom he nominated, or his wife and child, who share legal heirship with her?

This dilemma stems from the intersection of insurance laws and succession laws, creating a legal gray area.

The Insurance Laws (Amendment) Act, 2015, introduced the concept of a "beneficial nominee," granting immediate family members-spouse, children, or parents-full rights to the policy proceeds. However, succession laws tr...