Photo by DerrickT

The Insurance Nomination Law recently came into effect on 1st September 2009.

Before this law, there were a couple of problems with nomination of beneficiaries for your insurance policies, namely:

(this applies to all policies bought except those from NTUC Income which falls under a separate Act)

1) Nomination of spouse and children created an irrevocable trust. This means that policyholder no longer has beneficial ownership of the policy and cannot change nominees or cash out the proceeds without the consent of all the nominees.

2) Nomination of other people like parents, siblings, etc had no legal effect.

Under the new law (which does not apply retrospectively), those who take up insurance policies will have the option of creating either a revocable or trust (irrevocable) nomination. Read more…