Nomination of Beneficiaries
A new law governing insurance nominations came into effect on 1 Sep 09. This law clarifies existing uncertainties about nominations and trusts. New policy holders and existing policies without nominations (not applied retrospectively) can now name beneficiaries and change them when the need arises.
Before this law was passed, only certain co-operatives can nominate and change beneficiaries and be recognised as lawful beneficiaries. All other insurance policy nominations are not recognised. Policy holders had to declare a Section 73 statutory trust which renders the nomination unalterable even if there is a divorce. Policy holders also have to get consent from beneficiaries, should they wish to loan, cash out or withdraw an amount from the policy even if they are the rightful owner.
As a result of such confusion, insurance companies did away with nominations since 2002.
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