16 November 2011

Insurance nominee or beneficiary?


As a general rule, all your assets will be frozen when you die. With or without a will, your assets will be used to pay off creditors' claim and outstanding taxes before the leftover is being distributed to your family.

I guess by now everyone knows that only insurance proceeds and EPF balance are the 2 types of funds which will be paid directly to your nominee or beneficiary upon one's demise. These are said to be protected from creditors' claim even though a person is declared bankrupt prior to his death.

One thing you notice is that the terms beneficiary and nominee are always being used interchangeably.

In the context of EPF, they are the same. Your nominee is your beneficiary.

In life and personal accident insurance context, however, they are NOT. The following info are quoted and simplified from Section 166 of the Insurance Act.


Nominee is the person who will receive the money should you die. However, whether the nominee can use the insurance proceeds very much depends on your relationship with the nominee. 

If you are not married, your parents is your legal beneficiary. If your nominee is your parents, then your parents can use the death claim proceeds. If your nominee is not your parents, then he or she can only act as an executor who temporarily manages the money instead having the legal right to use the money.


If you are married, your spouse and your children (in that order) are your legal beneficiaries. If you nominate them in your policy, then they can use the death claim proceeds. If your nominee is not your spouse or children, then he or she can only act as an executor who manages the money (settling debt, taxes, etc) before distributing it to your legal beneficiaries.

In the event of non-nomination, the distribution of insurance proceeds will be according your your will or according to the Distribution Act if you die without leaving a will.

A good insurance agent will always make sure you name your nominee. Contact  your agent today if you did not fill in the nomination section previously, especially if you are married with dependants. This is important so that your spouse/children/parents will receive the money directly and thus avoiding that sum of money from going into your estate (subject to creditors' claim).


Bear in mind that the above is only applicable for non-Muslim.

For Muslim, these rules apply:

The nominee irrespective of relationship can only receive the policy moneys as an executor

The policy moneys must be distributed according to Islamic Faraid laws.



Muslims do not buy conventional insurance contracts because of the elements of uncertainty, gambling and interest. A special insurance arrangement known as Takaful is used in compliance with Syariah principles. 

11 comments:

  1. Hi! This is kind of off topic but I need some advice from an
    established blog. Is it hard to set up your own blog?
    I'm not very techincal but I can figure things out pretty quick. I'm thinking about making my own but I'm not sure where to begin. Do you have any points or suggestions? Many thanks
    Feel free to visit my web blog : www.teenpornsexpussy.com

    ReplyDelete
  2. Hmm is anyone else having problems with the images
    on this blog loading? I'm trying to determine if its a problem on my end or if it's the blog.
    Any responses would be greatly appreciated.
    My site :: Http://www.partygalleries.com

    ReplyDelete
  3. Exceptional post however , I was wanting to know if you could write a litte more on this topic?

    I'd be very thankful if you could elaborate a little bit further. Kudos!
    Visit my web-site : OnlyCruiser.com

    ReplyDelete
  4. This is very fascinating, You're a very skilled blogger. I've
    joined your feed and sit up for in the hunt for more of your fantastic post.
    Additionally, I've shared your site in my social networks
    Also see my webpage - Como Conquistar A Una Amiga

    ReplyDelete
  5. Malaysia & Singapore & brunei finest on-line blogshop for wholesale & supply korean
    add-ons, earrings, earstuds, locket, rings, hair, trinket & bangle
    add-ons. Offer 35 % wholesale discount. Ship Worldwide
    Take a look at my web page - emergency plumber

    ReplyDelete
  6. Malaysia & Singapore & brunei ultimate online blogshop for
    wholesale & quantity korean add-ons, earrings, earstuds, pendant, rings, bangle, hair &
    bracelet accessories. Promotion 35 % wholesale rebate. Ship Worldwide
    Here is my homepage ... hcg fortified with amino acids

    ReplyDelete
  7. Malaysia & Singapore & brunei finest on the internet blogshop for wholesale & quantity korean add-ons, accessories, earstuds,
    choker, rings, hair, bracelet & bangle add-ons.
    Deal 35 % wholesale rebate. Ship Worldwide
    Also visit my web page - this

    ReplyDelete
  8. Hi there, everything is going perfectly here and ofcourse every
    one is sharing data, that's actually fine, keep up writing.
    Have a look at my website ... click the following internet page

    ReplyDelete
  9. of course like your web-site but you have to check the spelling on several of your posts.
    A number of them are rife with spelling problems
    and I find it very bothersome to inform the truth then again I
    will surely come back again.
    Here is my web page ; Boat booking ecommerce specialist

    ReplyDelete
  10. I like it when people come together and share thoughts.
    Great blog, continue the good work!

    Also visit my homepage - taobao agent

    ReplyDelete
  11. Everyone loves it when people get together
    and share opinions. Great blog, continue the
    good work!

    My site ... emobilecode.freecommission.org

    ReplyDelete

Web Analytics