Nominate a Beneficiary Singapore | Why You Should Have a Beneficiary

by Priyadarshini 17 November 2022

Why should you nominate a beneficiary?

The Insurance Act allows policyholders to name beneficiaries for their insurance policies at the time of purchase or at any time after the policy is issued. In essence, naming a beneficiary helps to ensure that the benefits of your insurance policies are paid out to the right person, in the right amount, and according to your instructions.

Why should you consider naming a beneficiary?

Well, insurance nomination provides policyholders with a simple and cost-effective (free!) legal method of distributing policy benefits to their nominees.

You relinquish all rights to your policy

Proceed with a trust nomination only if you are absolutely certain. To begin, understand that when you make a trust nomination, you will be transferring both living and death benefits to your nominee(s). You must, however, continue to pay the policy’s premiums. You will no longer be able to make changes to the policy, take a loan under the policy, surrender the policy, request to switch funds, change the sum assured, make withdrawals, or even revoke the nomination due to the exchange of ownership and rights. To carry out the preceding, you must obtain written consent from all of your nominees or a trustee who is not yourself.

Only your spouse and/or children may be nominated

Keep in mind that the only people you can nominate for trust are your spouse and/or children. To carry out the preceding, you must obtain written consent from all of your nominees or a trustee who is not yourself.

At least one trustee is required

You must name at least one trustee to ensure that your policy benefits are properly administered and distributed to your beneficiary or beneficiaries when you make a trust nomination. Your trustee or trustees must be over the age of 18. Your trustee may also serve as your nominee. Subject to applicable law, you may also change your trustee or trustees at any time.

While you can name yourself as trustee, keep in mind that as the life assured, you are ineligible to receive policy proceeds or consent to the revocation of the trust nomination on behalf of your other nominee (s).

Your will does not always take precedence over your trust nomination

If you change your mind about the trust nomination and want to write a will to distribute your estate, including the proceeds from your insurance policies, make sure the trust nomination is revoked first! Remember that you can only give away property that you own through a valid will.

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