LIFE INSURANCE POLICY MONIES
If a deceased (being at least eighteen (18) years of age) had made a nomination under the Insurance Act, 1996 (“the lNS Act”) under his life insurance policy, the nominee shall be entitled to the deceased’s insurance policy monies. The insurer shall pay the policy monies upon receipt of claim by the nominee and the claim is accompanied by proof of death of the policy owner.
(Section 165(1) of the INS Act)
A nomination by a policy owner other than a Muslim policy owner, shall create a trust in favour of the nominee of the policy moneys payable upon the death of the policy owner, if:
a) the nominee is his/her spouse or child; or
b) where there is no spouse or child living at the time of nomination, the nominee is his/her parent.
(Section 166 (1) of the INS Act)
A payment of such policy moneys shall not form part of the estate of the deceased policy owner or be subject to his/her debts.
(Section 166 (2) of the INS Act)
However, a creditor of a policy owner may apply to court for a declaration that Section 166 of the INS Act, wholly or partly, is inapplicable to any particular policy on the ground that the premiums under that policy were paid to defraud the creditor.
(Section 166 (5) of the INS Act)
A nomination, including one made to which Section 166 of the INS Act applies, is revoked as follows :
(a) upon death of the nominee during the lifetime of the policy owner;
(b) by written notice given by the policy owner; or
(c) by subsequent nomination made by the policy owner during his/her lifetime.
Subject to the above, a nomination shall not be revoked by a Will or by any other act, event or means.
(Sections 164(1) & (2) of the INS Act).
However, a policy owner shall not deal with a poIicy to which Section 166 (1) of the Act applies by revoking a nomination under the policy, by varying or surrendering the policy, or by assigning or pledging the policy as security, without the written consent of the trustee.
(Section 166 (4) of the INS Act)
