Insurance, EPF and Joint Bank Accounts

Insurance, EPF and Joint Bank Accounts

insurance-policyInsurance Policy where a nomination has been made under Section 166 Insurance Act 1996.

Under S.166 Insurance Act 1996, if the policy holder has nominated:-

i) the spouse or
ii) children or
iii) parents provided at the time of nomination the policy holder does not have a child or spouse

A trust will be created on the money payable upon death. The money does not form part of the policy holder’s estate and therefore it CANNOT BE WILLED AWAY. This money is also not subject to creditor’s claim.

A Will cannot revoke a nomination made in an insurance policy.

Please note that a nominee other then the nominee under S. 166 takes the policy money as an executor unless the benefits of the policy is expressly assigned to him – s. 167. E.g. if a policyholder merely nominates the brother, the brother will have to distribute the policy money either according to policyholder’s Will or the Distribution Act.

* If no nomination is made, the policy money is paid to the applicant who produces the Grant of Probate/Letter of Admiistration/Distributor Order.


epfEmployee Provident Fund where nominees have been named.

Employees Provident Fund (EPF) where a nomination has been made – the nominee will receive the moneys. If there is no nomination, it will be received by the estate of the account holder. However, if a person has withdrawn the approved portion of his account to invest in unit trust that portion will still form part of his estate even thought a nomination has been made. In other words, that portion can be willed away. 



Properties held under joint ownership, e.g. joint bank account where the mandate gives the right of survivorship.

A joint bank account may not be able to will away. There are some uncertainties surrounding the issue of ‘survivorship clause’ in joint bank accounts. General opinion that, if the mandate is given to the bank when opening the account says that upon death of one of the account holder, the surviving account holder will be entitled to the moneys standing to his/her credit in that account. However this is arguable.

In light of the uncertainties surrounding this issue, firstly it is not advisable to will away a joint account to a third party event to the other joint account holder has contributed nothing to the account, unless there is an understanding and trust between the joint account holders to respect the wish of the testator to give the joint account to a third party.

Secondly, if a joint account has a survivorship clause it does not automatically benefit the surviving joint account holder then it may be advisable to will it to the other account holder if it is the intention to benefit him/her. Otherwise the moneys will form part of the residuary estate. Even if the moneys will go to the survivor; there is no harm in stating the obvious in the Will.

Finally, please note that there is a tendency in the practice of some banks to freeze a joint account even if there is a survivorship clause. This is based on the internal practice and policies of the bank rather than required by the law.

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