What’s a Nominee?
Life insurance protects your loved ones financially. If anything happens, you want your loved ones to be able to access these funds as soon as possible.
By appointing nominee(s), the policy monies can be disbursed much faster without the need to obtain the Grant of Probate or Letter of Administration or Distribution Order. Without a nomination, your insurance company is not obligated to release the policy monies until these documents are obtained, which may take 2-3 years. Obviously, you don’t want that to happen because it would put a lot of financial burden on your family.
How do I appoint a Nominee?
You appoint a nominee by submitting a Nominee form through your insurance company.
If it’s a new insurance policy, you can give the nominee details to your agent. The agent will submit the details alongside your application for insurance coverage.
If you have more than one Nominee, you will need to state the share per Nominee.
E.g. Spouse 50%, Son 25%, Daughter 25%
Is there a minimum age for my Nominee?
For non-Muslims, there is no minimum age. However, if your nominee is a minor, the funds will be held by your trustee.
For Muslims, claims by nominees below 18 are invalid as per the Nomination Policy (effective Jan 1, 2017). Thus, it only applies if they are over 18 years old.
Do I need to write my insurance policy Nominee(s) in my will?
If you have already appointed your insurance Nominee(s), you do not need to write your insurance Nominee(s) in your will. (It is the same for your EPF Nominees).
I am a Muslim policy owner. Can I make a nomination?
Yes, a Muslim policy owner may make a nomination to ensure that the policy monies are distributed faster. The Nominee of a Muslim policy owner receives the policy monies only as an executor and distribution must be in accordance with Islamic laws. In the event that there is no nomination, the policy monies will go to the Public Trustee and therefore may take some time to distribute.
As a Muslim, you can choose to give the insurance policy as a gift (hibah) while you are still living to ensure that he/she receives its benefits.
For an EPF nominee, it is considered a gift and is given directly to the nominee. This can be done with an insurance policy assignment.
What if your nominee dies?
If you are still alive, the eligible portion will then go to your next-of-kin.
If you have passed away, the eligible portion will go to your nominee’s next-of-kin.
What if BOTH you & your nominee(s) all die together?
If EPF savings < RM25,000:
- Initial sum of RM2,500 paid to next-of-kin
- Remaining will be paid 2 months after date of death
If EPF savings > RM25,000:
- Initial sum of RM2,500 paid to next-of-kin
- 2nd payment of up to RM17,500 paid 2 months after date of death
- Remaining will be paid upon submission for Letter of Administration/Letter of Probate/Distribution Order/Faraid Certificate (costs may apply)
Is there a deadline for submitting my claims application?
Yes. For EPF, claims should be done within 1 year from death. If not, it will proceed as if no nomination was made.
What’s a Trustee?
A Trustee is an individual person or a member of a board given control or powers of administration of property in trust with a legal obligation to administer it solely for the purposes specified.
What is a Trustee’s obligations?
In discharging his/her duties, a Trustee must exercise the utmost diligence & would be personally liable if there is any breach of trust. Examples of a Trustee’s duties include:-
- Duty not to profit from trust
- Duty to be impartial
- Duty to account
- Duty against a conflict of interest or self dealing
What are the requirements to become a Trustee?
Above 21 years of age and of sound mind.
Can a Trustee be a foreigner?
Yes. A Trustee can be a non-Malaysian. However, ensure that your Trustee is staying long-term in Malaysia, or else he/she would need to travel to Malaysia to carry out his/her duties & may cause delays in estate proceedings.
Can my Nominee also be my Trustee?
Yes. Please check with your insurance provider, bank, or relevant party for more details.
Must I appoint a Trustee?
You may choose not to appoint a Trustee (only appoint a Nominee).
