Policy owners who have named themselves as the trustee to their life policies prior to the enforcement of the Financial Services Act 2013 (FSA) on June 30, 2013 can now heave a sigh of relief as the Life Insurance Association of Malaysia (LIAM) has revealed they can continue to do so. Under the previous Insurance Act 1996, policy owners were allowed to be appointed as trustees of their own policies."For all these policies, the policy owners can continue to act as trustees of their own policies even under the FSA," LIAM president Vincent Kwo said in a statement on Friday.
However, he pointed out that for new policies issued or new nominations submitted from June 30, 2013 onwards, policy owners cannot appoint themselves as trustees under the FSA.
"They can appoint any one whom they trust as trustees. This includes their family members, friends or even a trust company," he said. Kwo noted that if a policy owner has not appointed a trustee for policies issued under the FSA, the spouse and/or children (who have reached the legal age of 18 years) are presumed trustees under the policies.
"If there are no presumed trustees under the policy (if the spouse has passed away and the children are under the age of 18), the insurance company will pay the policy moneys to Amanah Raya Bhd as the country's public trustee," he added.
Kwo stressed that the role of the trustee – be it an individual appointed by the policy owner, or a trust company or a public trustee – is to protect the interest of the nominees.
"All nominations made under the previous Insurance Act 1996 and the FSA will remain valid and the payment of policy monies will be made according to the nominations.
"Policy owners should have the assurance that the policy moneys will not be frozen upon his or her death. We advise policy owners to contact their life insurance companies for further clarification on this matter," he added.
No comments:
Post a Comment