The Concept and Effects of the Beneficiary in an Insurance Contract

Abstract

The insurance beneficiary refers to any natural or legal person mentioned in the insurance contract, including the policyholder, who has an interest in all or part of the insured subject. According to Article 4 of the Insurance Act enacted in 1937, the person entitled to receive compensation is the one who has an interest in the insured property and benefits from its continued existence. It is presumed that the policyholder is also the insurance beneficiary. Accordingly, the absence of an insurable interest leads to the nullity of the insurance contract. The primary question arising in this context is: Who qualifies as the insurance beneficiary in an insurance contract, and under what conditions can an insurable interest be transferred to another party? Additionally, in a contract involving the transfer of property, if the transferee insures the asset and the nullity of the contract is subsequently discovered, who is deemed the insurance beneficiary? This study, conducted using a descriptive-analytical method, establishes that in the transfer of an insurable interest to another party, the rights and obligations arising from the insurance are transferred to the transferee under specific conditions. Based on the principle of insurable interest, if a person insures another’s property, the beneficiary is the owner of the property. Furthermore, if, after the conclusion of the insurance contract, the owner transfers the insured property to another person, the policyholder’s interest ceases. In cases where the nullity of the contract transferring the property is discovered, the real owner is considered the insurance beneficiary, and the policyholder is generally entitled to reclaim the premiums paid from the insurance beneficiary.