If you have purchased insurance policies, you may have already made nominations which put in place the nominees who will receive the insurance policy proceeds in the event of your death or permanent disability, depending on the type of insurance you have bought.
Unlike CPF monies which cannot be distributed with a will, insurance policy proceeds may or may not be distributed according to your will depending on the type of nomination you have made in respect to your insurance policies.
Here are the 2 types of nominations:
1. Trust Nomination
Trust nominations essentially create a trust over the insurance policy proceeds, this form of nomination protects the insurance proceeds from creditors as it is structured as a statutory trust policy according to section 49L of the Insurance Act.
Once a trust nomination is made, you lose all rights as the policy owner and written consent from your beneficiaries or trustee is required for any changes, such as, withdrawal, policy loans and fund switch. Thus you will not be able to override a trust nomination with your will as all changes require consent from the beneficiaries or trustee.
2. Revocable Nomination
In the case of a revocable nomination, you retain your right as policy owner and will be able to make changes, including the revoking of nomination without consent from the beneficiaries.
You can revoke a nomination and distribute the insurance policy proceeds with your will as long as you meet the relevant requirements under the Wills Act and the regulation 5(3) of the Insurance (Nomination of Beneficiaries) Regulations 2009.
While the distribution of proceeds of an insurance policy with a revocable nomination through your will is possible, it can be a lengthy and complex process. It is recommended to revoke and make a new nomination with your insurance company directly instead and then if you wish to, you may include details of your insurance policy in your schedule of assets so that it makes it easier for your executor of will to identify your assets.
If you would like to proceed with distributing your insurance policy proceeds through your will or have any questions about insurance nominations or will writing in Singapore and require professional assistance of an estate planning lawyer, feel free to get in touch with us.
