2.4 Nomination of Beneficiaries
Key Takeaways
Nomination of beneficiaries under the Insurance Act applies to life policies and to accident and health policies with death benefits, and has been available since 1 September 2009.
Only a policy owner who is the life assured and at least 18 years old may nominate, using either a trust nomination or a revocable nomination.
A trust nomination (section 132, formerly section 49L) may name only the spouse and/or children, gives up ownership of the policy and generally protects the proceeds from creditors.
A revocable nomination (section 133, formerly section 49M) may name any individual or legal entity; the owner keeps control and receives living benefits, while nominees receive death benefits.
Without a nomination or a will, an insurer may pay up to S$150,000 to a proper claimant, such as a widow, child or parent, under section 150 of the Insurance Act.
2.4 Nomination of Beneficiaries
Quick Summary: Since 1 September 2009, the Insurance Act has let policy owners of life policies and of accident and health (A&H) policies with death benefits, such as personal accident policies, nominate who receives the policy money. There are two types. A trust nomination names only the spouse and/or children and is largely irrevocable. A revocable nomination can name anyone and can be changed at any time.
Why Nominations Matter
Without a nomination, policy money normally forms part of the deceased's estate. The family may then need a Grant of Probate (where there is a will) or Letters of Administration (where there is none) before the insurer can pay, and both can involve fees and delay. A valid nomination lets the insurer pay the named nominees directly, quickly and cheaply. For a general insurance practitioner, this matters most for personal accident policies with death benefits, which are A&H policies within the nomination rules.
Who Can Nominate and on What Policies
- The rules apply to life policies and A&H policies with death benefits issued by licensed insurers. Riders follow the main policy.
- The policy owner must be the life assured and at least 18 years old.
- The rules do not apply to group insurance, where the employer or organisation owns the policy but is not the life assured.
- Some CPF and related schemes restrict nominations. For example, trust nominations are not allowed for CPF Investment Scheme, Dependants' Protection Scheme and Supplementary Retirement Scheme policies, or for Integrated Shield Plans.
- Muslim policy owners may make both types of nomination. Nominations made before 1 September 2009 under the Conveyancing and Law of Property Act continue to be recognised.
Trust Nomination (Section 132, formerly Section 49L)
| Feature | Rule |
|---|---|
| Who may be nominated | Only the spouse and/or children |
| Ownership | The policy owner loses all rights of ownership; the policy is held on trust for the nominees |
| Benefits | Nominees receive both living benefits (for example a critical illness payout) and death benefits |
| Changes, loans, surrender | Need the written consent of every nominee (or the parent or guardian of a nominee under 18, who must not be the policy owner) or of any one trustee who is not the policy owner |
| Trustees | Must be appointed; individuals aged 18 or above, or entities. The owner may be a trustee but cannot receive the money or consent to revocation |
| Creditors | Proceeds are generally protected from creditors in bankruptcy |
| Effect of a later will | None, because the policy no longer belongs to the owner |
| Divorce or remarriage | Does not affect the nomination |
| Nominee dies first | That nominee's share goes to the nominee's estate |
| Form | Form 1, completed in hard copy with original wet-ink signatures; online submission is not available |
Revocable Nomination (Section 133, formerly Section 49M)
| Feature | Rule |
|---|---|
| Who may be nominated | Any legal entity: an individual, association or corporation, including the spouse and children |
| Ownership | The owner keeps full rights and ownership and may change or revoke the nomination at any time without the nominees' consent |
| Benefits | Living benefits go to the owner; nominees receive only the death benefits |
| Creditors | Proceeds are not protected in the way trust-nominated proceeds are |
| Form | Form 4; online submission is possible if the insurer offers it (permitted from 2 January 2024) |
A revocable nomination is revoked by:
- a later revocable nomination (Form 4) or trust nomination (Form 1);
- a notice of revocation (Form 5);
- a later will that deals with the policy money in the way the Act requires, identifying the policy and the beneficiaries and their shares;
- an assignment of the policy; or
- the death of the only nominee, or of all the nominees. If some nominees die first, the survivors share the deceased nominees' portions in proportion to their original shares.
Formalities Common to Both
Each nomination form must be signed in the presence of two witnesses (appropriate signatories) aged at least 21 who are not nominees or the spouses of nominees. The percentage shares must add up to 100%. The insurer pays according to the latest properly executed instrument it knows of at the time of the policy owner's death.
When There Is No Nomination
If there is no nomination and no will, the insurer may pay up to S$150,000 of the policy money to a proper claimant under section 150 of the Insurance Act. Proper claimants include the widower, widow, parent, child, brother, sister, nephew or niece of the deceased. Any amount above S$150,000 is paid to the administrator under a Grant of Letters of Administration. If the deceased left a will and the insurer was notified, the money can be distributed according to the will.
Side-by-Side Comparison
| Question | Trust nomination | Revocable nomination |
|---|---|---|
| Owner keeps control? | No | Yes |
| Eligible nominees | Spouse and/or children only | Any individual or legal entity |
| Who gets living benefits? | Nominees | Policy owner |
| Revoked by a later will? | No | Yes, if the will meets the statutory requirements |
| Creditor protection | Generally yes | No |
| Can the policy be assigned? | Not unless the nomination is revoked | Yes, but assignment revokes the nomination |
A 40-year-old wants to make a trust nomination on her personal accident policy in favour of her mother. What is the position?
It is allowed if two witnesses aged 21 or above, who are not nominees, sign the form
It is allowed only if her spouse consents in writing
It is allowed if the mother is appointed as trustee
Not allowed: only a spouse or children can be trust nominees
A policy owner made a revocable nomination in 2024 and later executed a will that specifically deals with the policy money in the way the Insurance Act requires. What is the effect of the will?
The earlier revocable nomination is revoked
The will has no effect on any nomination
The nominees must consent before the will takes effect
The will converts it into a trust nomination
Under a trust nomination, who is entitled to a critical illness benefit paid while the policy owner is still alive?
The policy owner, because living benefits stay with the owner
The nominees
The policy owner's creditors
The insurer's trustee company
Sections you finish are checked off in the contents.