Difference Between Nomination Vs Assignment in Life Insurance Explained

What Is Nomination in Life Insurance?

What Is Assignment in Life Insurance?

What Are the Differences Between Assignment and Nomination in a Life Insurance Policy?

To understand the process of a life insurance policy, understanding what nomination and assignment are vital.

So, to learn about their contrasting features, here is a table demonstrating the key points of nomination vs assignment:

Points of Comparison




Nominees are selected by you (the policyholder) to get the benefits of your life insurance policy.

You can transfer your life insurance ownership rights to the assignee. This transfer can be with or without any conditions.

Policy Ownership

The ownership of your policy remains unchanged in the nomination process.

The ownership of your policy is changed through the assignment process from you (assignor) to the assignee.


To assign one or more persons to enjoy the benefits of your life insurance in the event of your unfortunate demise.

To transfer all the rights and control of the policy to another person or entity for various reasons.

Claim Benefits

The claim benefits will be received by the nominee when the policyholder passes away.

After the death of the life insured, their assignee will enjoy the claim benefits; in this case, the assignee also becomes a nominee of the policy.


There is no need for a witness in nomination. However, in the case of minor nominees, you need to choose an appointee who handles the claim amount under their name until the nominee is 18.

For the assignment process to be valid, there is a need for at least one witness.

Right Consideration

The nomination process is not a legal endorsement. Thus it does not require the authorisation of the insurer or any witnesses. You can simply set or change your nominee through mail or letter.

An assignment is a legal process. Therefore, it needs to be changed only by authorisation of the insurer on the original policy bond.

Policy Amount

Your nominees will be entitled to receive death benefits in case of an unfortunate occurrence.

Your assignee will receive the policy money.

What Are the Types of Nominees in Life Insurance?

What Are the Types of Assignments in Life Insurance?

FAQs about Nomination Vs Assignment in Life Insurance Policy

Do the nominees remain unchanged after the assignment process?

No, in an assignment, when you assign your policy to somebody (assignee), the nomination gets cancelled by your insurance provider. However, if the assignment is temporary, for instance, if you owe loan repayment to the bank, then the policy rights will transfer back to you once you repay those loans.

What is the endorsement process for an assignment?

The endorsement in an assignment is where you sign the endorsement form to transfer your rights to the assignee. Furthermore, to complete the process, you need a witness to sign the documents. Next, you mention the reason for your transfer and the terms and conditions, if any. In addition, the details of the assignee are also required to be entered in the assignment.

Why is assigning a nominee essential?

Assigning nominees is extremely important in the case of life insurance plans to ensure that your dependents are financially covered for rainy days. Nomination gives you the control as a policyholder to decide who the money goes to in case of your unfortunate demise. Without it, your family may face a long-drawn legal process to determine who the money goes to.