What Your Should Know About Nominating A Beneficiary
An insurance policy allows you to nominate one or more beneficiaries. Here are some things you should know about making a nomination.
1. Who can I nominate?
You can nominate just about anyone you choose.
2. I hear that sometimes a trust created when I nominate someone. How does that happen?
Under Section 166 of the Insurance Act 1996, if the policy owner is a non Muslim and nominates either:-
- a spouse or child,
- or parents (where there is no spouse or children living at the time the nomination is made)
then a trust is created in favor of the person(s) nominated.
3. Do I have to appoint Trustee(s) when a trust is created in my policy like the case above?
While it is not compulsory to appoint a trustee, it is advisable to do so for ease of administration of the policy.
4. Who can I appoint as trustee?
You can appoint a person who has reached the age of majority (18 years of age) or a corporation to be a trustee.
5. I have nominated someone before. Now I’ve changed my mind and want to nominate someone else. How can I do that?
Under the Insurance Act 1996, a nomination can be revoked in 1 of 3 ways:-
- when 1 or all the nominee dies, while the policy owner is still alive,
- by a notice in writing given by the policy owner, or
- by any subsequent nomination