No discrimination based on sexual orientation when selecting an insurance nominee

New Delhi: Lesbian, gay, bisexual, and transgender couples recently won another victory by being allowed to name their partners as nominees in insurance policies, nearly four years after same-sex relationships were legalised in September 2018 when the country's highest court struck down Section 377.

According to reports, the Life Insurance Corporation of India (LIC) has confirmed that same-gender partners can nominate each other in insurance policies. It was stated in response to an RTI request from a gay couple in Kolkata.

Suchandra Das and Sree Mukherjee made this request, which is significant in light of banks’ refusals to accept same-gender couples as policy nominees.

In practice, this means that a policyholder is not prohibited from naming a nominee who is not related to him or her by birth, consanguinity, marriage, or adoption.

The couple had also knocked on the door of the banking regulator. The RBI maintained that there is no mention of any condition, nor are there any restrictions on who can be a nominee. As a result, it is clear that no bank can insist on having only someone related to me serve as a nominee.

This does not necessarily imply that a lesbian, gay, bisexual, or transgender person’s partner is entitled to the entire proceeds of an insurance claim. Being a nominee entails serving as the policyholder's agent.

At the same time, legal procedures are in place to make such a nominee the fund’s successor. To do so, the policyholder or bank account holder must leave the funds in a registered will, effectively making the nominee a successor as well.

However, how the state insurer's clarification will affect queer couples remains to be seen, but one thing is certain: they now have a reason to celebrate, as this clarification is set to empower the financial well-being of the queer population.