Advantage of a Nomination

NTUC Income allows a policyholder to make a specific nomination for each insurance policy. This allows the proceeds to be paid to the nominees named in the nomination.

If there is no nomination, the proceeds (up to $150,000) will be paid to a "rightful claimant" which is defined in the Insurance Act as the spouse or a family member. The rightful claimant receive the money and distribute it in an appropriate member among the family members.

The policy proceeds will be part of the estate. There will be other assets as well, such as shares, property and cash.

If there is a will, the estate will be distributed according to the will. If not, it will be distributed according to the intestate law.

However, in most cases, the family members will agree on how the estate is to be distributed. They do not need to follow the formula in the intestate law.

The advantage of a nomination is for the policyholder to set aside a sum of money to be distributed specifically to the nominees. This is useful, if the policyholder has a specific intent. Otherwise, the distribution according to the will or intestate law is a fairer way.