State the incorrect sentence.

A. In assignment the rights of the assured are transferred to the assignee

B. There is no difference between nomination and assignment

C. In a policy loan the loanee-policyholder is not obligated to pay off the loan

D. As a general rule, no alteration is allowed in the first year of the policy

Answer: Option B

Solution(By Examveda Team)

Nomination is a right given to the life insurance policyholder to appoint a person or persons to receive the benefit under the policy in case it becomes a death claim. One can typically come across an assignment where the policyholder is trying to use the life insurance policy as collateral against a loan he intends to raise. However, one must note that the assignment must be in writing and a notice to that effect must be given to the insurer.