If You Took Up An Insurance Policy Before July 2002, Please Read On

By Cassie Zheng

Many might not have known, nomination of beneficiaries before July 2002 in most insurance proposal has no legal effect if it is for the benefit of person(s) other than spouse and/or children.

And if you have named your spouse and/or children, an implicit trust under Section 73 of the Conveyancing and Law of Property Act, which means this interest could not be revoked by the insured.

To help you better understand the scenerio;

Eg. Mr G took up a policy during year 2000, June when he has just gotten married to Wife A.

Policy insured amount : S$200,000

Nominated Wife A to be beneficiary in policy under or unintentionally/ not noticed because did not pay attention to the clause Section 73.

In 2003, divorced Wife A and remarried in year 2005 to Wife B and have 1 Son.

Unfortunately, met with a car accident and passed on.

So who do you think should get the money? A full sum of S$200,000.

EX-Wife A or poor widow B and young son?

Answer: Ex-Wife A

Why? Because of Section 73 of course.

So what should you do now if you have taken up any policy before July 2002 when you have named spouse/ ex-spouse and/or children under section 73?

Decide for yourself whether you really love and want them to benefit from that insurance proposal.

If you have decided that you do not wish to depart full amount or anything to them, you can only seek an agreement between you and the previously nominated spouse/ children to revoked the nomination. This issue of Section 73 will not be even able to settle with a written will or trust.

Now, probably you wondered why this started. This type of trust is created by operation of law where it is to protect the interest of the nominee(s) in a life insurance policy.

To discuss in person with me, make appointment via email at cassiezhng@gmail.com and confirmation will be returned asap.

P/s: Section 73 mentioned above applies in Singapore, if you are from other countries check with your legal representative or financial consultant for clarifications.

Cassie Zheng a full time Professional Financial Consultant. Currently residing in Singapore. Certified in Transactional Analysis. Email at; cassiezhng@gmail.com or visit http://cassiezheng.i.ph for more articles