Under the Insurance Act, the type of nomination a policy owner can make depends on how the policy is funded. For policies purchased with cash, both trust and revocable nominations are generally permitted. However, for policies funded through the Supplementary Retirement Scheme (SRS), a trust nomination is not allowed. The rationale behind this restriction is that SRS funds are intended for an individual’s own retirement accumulation. A trust nomination, being irrevocable, would transfer the beneficial interest of the policy to the nominee(s), meaning the policy owner loses control over the policy proceeds. This contradicts the fundamental principle of the SRS, which is to allow the individual to control and grow their personal retirement savings. Therefore, only revocable nominations are permitted for SRS-funded policies. The fact that the policy owner is a Muslim does not alter this specific rule concerning SRS-funded policies, although they are generally able to make trust nominations for their cash-funded policies.

A fundamental principle of insurance, as outlined in the MAS Notice 302 and the general principles of risk management, is that the risk must be a ‘pure risk’ (involving only the chance of loss or no loss) rather than a ‘speculative risk’ (involving a chance of loss, no loss, or gain). The scenario describes a speculative business risk. The success or failure of a product launch due to competition is influenced by market dynamics, strategic decisions, and other business factors, not by random, accidental chance. Insurers rely on the law of large numbers to predict losses from a large pool of similar, independent exposures. The probability of a competitor launching a better product is not statistically predictable in the same way as mortality rates or accident frequencies. Therefore, the loss rate is not reliably calculable, and the event is not considered fortuitous in the insurable sense. While the loss amount might be definite and significant, its fundamental nature as a business risk makes it uninsurable. The other options are incorrect because the loss is clearly significant, it is not necessarily catastrophic to a large insurer, and the issue is not that the loss is indefinite but that its probability is incalculable.

According to Section 57 of the Insurance Act (Cap. 142), for a life insurance policy to be valid, insurable interest must exist at the inception of the contract. It is not required to be present at the time of the claim (i.e., the death of the life insured). In this scenario, Mr. Tan had a clear and demonstrable financial interest in Mr. Lee’s continued life when the policy was purchased, as Mr. Lee was a key employee whose death would cause a significant financial loss to the business. This established the necessary insurable interest at inception. The fact that Mr. Lee later retired and the insurable interest ceased to exist is irrelevant to the validity of the policy. The contract was valid when issued, and as the designated beneficiary, Mr. Tan’s company is entitled to the full death benefit upon Mr. Lee’s passing.

A detailed explanation of the non-forfeiture options is crucial here. When a policyholder with a traditional life policy (like Whole Life or Endowment) that has accumulated cash value can no longer pay premiums, they have several non-forfeiture options, as outlined in the Insurance Act (Cap. 142). The client’s primary objective is to maintain the highest possible death benefit, even if it’s for a limited time. The Extended Term Insurance option uses the policy’s net cash value as a single premium to purchase a term insurance policy. The key feature of this option is that the sum assured remains the same as the original policy. The length of the term coverage is determined by the amount of the net cash value available. This directly addresses the client’s goal. In contrast, the Reduced Paid-up Insurance option also uses the cash value as a single premium but purchases a permanent policy with a reduced sum assured. A policy loan only provides a temporary solution to pay premiums and creates debt against the policy, while surrendering for cash terminates all insurance coverage, which is contrary to the client’s wishes.

The underwriter’s goal is to assess the risk presented by a proposer with a pre-existing medical condition. While a standard medical exam provides a current snapshot of health, it lacks the historical depth needed to evaluate a chronic condition’s management over time. The Attending Physician’s Report (APR) is specifically requested from the proposer’s own doctor to gain this crucial long-term perspective. The APR provides details on the history of the illness, the prescribed treatment regimen, the proposer’s consistency in following medical advice (compliance), the effectiveness of the treatment in controlling the condition, and the attending physician’s professional opinion on the long-term prognosis. This detailed historical information is essential for the insurer to accurately price the risk or decide on the terms of acceptance. Financial documents are for assessing moral hazard and affordability, while a lifestyle questionnaire assesses risks from habits and hobbies; neither addresses the specific medical history in sufficient detail.

A key distinction between Investment-Linked Policies (ILPs) lies in their charging structure, specifically whether they are front-end or back-end loaded. In a front-end loaded structure, a portion of the initial premiums is used to cover the insurer’s administrative and distribution costs. Consequently, the premium allocation rate—the percentage of the premium used to purchase investment units—is less than 100% in the early years of the policy. This rate typically increases over time, sometimes exceeding 100% in later years as a loyalty incentive. In contrast, a back-end loaded structure allocates 100% of the premiums to purchase units from the outset. To recover its initial expenses, the insurer imposes a surrender charge if the policyholder terminates or makes a partial withdrawal from the policy within a specified period. This charge usually decreases over time and eventually disappears. Therefore, while a back-end loaded plan shows a higher initial investment value, it carries a significant penalty for early termination, whereas a front-end loaded plan has a lower initial investment value but does not have this specific type of surrender charge. This information is crucial for clients to understand and is detailed in the Product Summary, in line with the MAS’s requirements for product transparency.

A detailed explanation of the answer and reasoning. According to the principles governing group term life insurance policies in Singapore, an individual employee’s coverage is contingent upon specific employment conditions. A key provision for termination of coverage, as outlined in the CMFAS M9 syllabus, is when an employee is transferred to an overseas associated or subsidiary company for an extended duration and is consequently removed from the local payroll. In this scenario, Mr. Chen’s removal from the Singapore payroll and placement onto the overseas entity’s payroll for a two-year term triggers this termination clause. Therefore, at the time of his death eight months later, his coverage under the Singapore group policy had already ceased. The claim’s validity is determined by the insured’s eligibility at the time of the event, not by procedural documentation like a coroner’s report, nor by the technicality of his employment status being a ‘secondment’ rather than a termination. Even if the employer had mistakenly continued to pay a premium for him, the insurer’s liability is voided by the fact that the employee no longer met the policy’s eligibility criteria.

Under the Singapore Income Tax Act, withdrawals from a Supplementary Retirement Scheme (SRS) account are subject to specific tax treatments. For a foreigner who is not a Singapore Permanent Resident, a key concession is available if they have maintained their SRS account for a minimum of ten years from the date of their first contribution. In this scenario, the individual made their first contribution in July 2014 and is withdrawing in August 2024, satisfying the ten-year holding period. Consequently, they are eligible for the tax concession where only 50% of the total amount withdrawn is considered taxable income. This amount is subject to a withholding tax at the prevailing non-resident tax rate. The 5% penalty for premature withdrawal is waived in this specific circumstance. Therefore, taxing the full amount or applying a penalty would be incorrect, as would be the assumption that the withdrawal is entirely tax-free.

A Joint and Survivor Annuity is specifically designed to provide income for two or more individuals, with payments continuing until the last person dies. A common variation of this annuity, as described in the scenario, allows for the income payment to be reduced (e.g., to 50% or two-thirds) after the first annuitant’s death. This feature makes the annuity more affordable while still providing a lifelong income for the surviving partner. A Joint Life Annuity is incorrect because its payments cease entirely upon the death of the first annuitant. A Single Life Annuity is unsuitable as it only covers one individual’s life. A Participating Annuity’s primary feature is sharing in the insurer’s profits through bonuses, which is unrelated to the core requirement of providing income for a surviving spouse.

According to the Life Insurance Association (LIA) guidelines for Benefit Illustrations (BI) for participating policies, the projected investment rates of return (currently 3.75% and 5.25%) are used purely for illustrative purposes. They are standardized across the industry to provide a consistent basis for comparing policies and to demonstrate how policy values, particularly the non-guaranteed components like bonuses, might perform under different investment scenarios. It is a regulatory requirement to clarify that these rates are not guaranteed, nor do they represent the minimum or maximum expected performance of the insurer’s participating fund. The actual returns will depend on the future performance of the fund’s assets. Providing any explanation that suggests these rates are guaranteed, historical averages, or a definitive range of future outcomes would be misleading and a violation of fair dealing principles under the Financial Advisers Act (FAA). The representative’s primary duty is to ensure the client understands the non-guaranteed and illustrative nature of these projections.

The core objective of a participating fund is to provide stable and competitive medium to long-term returns to policy owners. A key mechanism to achieve this is the practice of ‘smoothing’. This means that the annual bonuses declared are not directly tied to the investment performance of the fund in any single year. During years of strong performance, the insurer sets aside a portion of the surplus as reserves. In years of poor performance, like the one described, the insurer draws upon these accumulated reserves to maintain a stable annual bonus rate. This approach ensures fairness between different generations of policyholders and avoids excessive fluctuations in returns, which is a fundamental feature of participating policies. Drastically cutting the bonus to reflect a single year’s performance would undermine this objective of stability. While terminal bonuses are adjusted based on long-term performance, the annual bonus is managed for consistency. The 90:10 rule, as stipulated under the Insurance Act, further ensures that policyholders receive a fair share of the profits from the participating fund over time.

The primary purpose of a life insurance proposal form is to provide the insurer with all material information necessary to underwrite the specific risk being applied for. Different insurance products carry different types of risks. A traditional whole life policy primarily involves mortality and morbidity risks. An Investment-Linked Life Insurance Policy (ILP), however, includes these risks plus a significant investment risk component. Consequently, the underwriting process for an ILP must assess not only the life insured’s health and lifestyle but also their investment knowledge, experience, financial situation, and risk appetite to ensure the product is suitable. Regulatory bodies like the Monetary Authority of Singapore (MAS) place strong emphasis on product suitability assessments, particularly for complex products like ILPs. Therefore, an ILP-specific proposal form contains sections and questions designed to capture this investment-related information, which is absent from a standard traditional policy form. While administrative protocols and the need for updated declarations are valid reasons for a new form, the most critical reason for using a product-specific form is to conduct a complete and appropriate risk assessment for that particular product.

The core principle governing amendments to a life insurance proposal form is that the proposer must provide explicit, written approval for any changes. The proposal form is a legal document that forms the basis of the insurance contract. Once signed, the proposer attests to the accuracy of all information provided. Therefore, any subsequent alteration, regardless of how minor, must be authenticated by the proposer to be valid. This is typically done by having the proposer initial or countersign directly next to the correction on the physical form. This practice prevents disputes regarding the accuracy of information at the claims stage and upholds the principle of utmost good faith. Verbal consent, email confirmations, or relying on the insurer to make changes are not acceptable substitutes as they do not provide the same level of legal certainty as a handwritten endorsement on the original document.

A Guaranteed Insurability Option (GIO) Rider provides the policy owner with the right, but not a requirement, to purchase additional insurance coverage on the life insured at specified future dates or upon the occurrence of certain life events, such as marriage or the birth of a child. A key feature of this rider is that this additional coverage can be obtained without providing new evidence of insurability. The premium for any additional insurance purchased under this option is calculated based on the life insured’s attained age at the time the option is exercised, not their age when the original policy was issued. Furthermore, if the policy owner chooses not to exercise the option on a particular date, that specific opportunity lapses, but it does not invalidate their right to exercise the option on subsequent available dates. This rider is particularly valuable for juvenile policies, as it secures the child’s future insurability regardless of any potential health deterioration.

A fundamental principle in policy servicing is that the treatment of a reduction in the sum assured is contingent upon whether the policy has accumulated any cash value. For a policy that has been in force for a significant period and has built up a cash value (Policy X), a reduction in the sum assured is processed as a partial surrender. This means the policy owner is effectively cashing out a portion of their policy, and they would receive the cash value corresponding to the reduced amount of coverage. Conversely, for a new policy that has not yet acquired any cash value (Policy Y), a reduction in the sum assured is treated as a partial lapse. In this case, the portion of the coverage is simply terminated without any financial payout, as no value has yet accumulated. The other options are incorrect because they either misapply these principles or assume a uniform treatment for both policies, failing to recognize the critical distinction based on the presence of cash value.

A combination of a Term Life policy and an Endowment policy is the most suitable strategy for Mr. Lim. The Term Life policy addresses his primary need for high-level, cost-effective income protection for his dependents over a specific period (until his children are financially independent). Term insurance provides a significant death benefit for a relatively low premium because it does not accumulate cash value. Concurrently, a separate Endowment policy serves as a disciplined savings vehicle. It is designed to pay out a guaranteed lump sum upon maturity, which can be timed to coincide with his planned retirement, thus fulfilling his second objective of accumulating funds for retirement. This ‘buy term and invest the difference’ approach (though using an endowment instead of pure investment) allows for a more tailored and budget-conscious solution compared to a single, more expensive Whole Life policy. A Whole Life policy, while offering both protection and savings, might require a prohibitively high premium to achieve the same level of death benefit, potentially making it unaffordable. Relying solely on a Term policy would neglect the savings goal, and relying solely on an Endowment policy would likely provide insufficient death benefit for the premium paid. This recommendation aligns with the principles of needs analysis under the Financial Advisers Act (FAA), which requires representatives to recommend products that are suitable for a client’s specific financial objectives, situation, and needs.

Under the Insurance Act (Cap. 142), a trust nomination creates a statutory trust over the policy proceeds in favour of the nominees. This action is generally irrevocable, meaning the policy owner relinquishes their right to unilaterally alter the beneficiaries or deal with the policy proceeds. To revoke a trust nomination, the policy owner must obtain the written consent of all nominees. If a nominee is a minor (below 18 years old), consent must be obtained from their legal guardian, provided that guardian is not the policy owner. In this scenario, Mdm. Lim is an adult nominee, and Ken is a minor nominee. Therefore, Mr. Tan requires the written consent of Mdm. Lim in her capacity as an adult nominee. Additionally, since Ken is a minor, consent is needed from his legal guardian. As Mdm. Lim is the other parent, she would be the legal guardian whose consent is required. A policy owner who is also a trustee cannot provide consent for revocation on behalf of any nominee. Simply creating a new nomination or a will does not override a valid trust nomination; the formal revocation process must be completed first.

A key feature of traditional participating life insurance policies is that the life fund’s assets are managed to provide stable long-term returns for policyholders. The profits generated by this fund are distributed back to policyholders in the form of non-guaranteed bonuses. To avoid large fluctuations in bonus declarations from year to year, insurers practice a concept known as ‘smoothing’. This involves retaining a portion of the investment profits during years of strong market performance to build up reserves. These reserves are then used to cushion or subsidize bonus payments during years when the market performs poorly. This ensures a more stable and predictable, though not guaranteed, stream of bonuses over the policy’s lifetime. The insurer’s actuaries and board have discretion over the amount of bonus declared, considering the fund’s actual experience, future investment outlook, and the need to maintain fairness among different groups of policyholders. Therefore, a single year of high profits for the insurer does not automatically translate into a proportionally high bonus for that specific year. The other options are incorrect because illustrations are explicitly not guaranteed, profits from shareholder funds are separate from the participating fund, and the guaranteed cash value is a distinct component from the non-guaranteed bonus.

Under the Singapore Income Tax Act, a taxpayer may be eligible for Life Insurance Relief on premiums paid for a policy on their own life or their spouse’s life. However, this relief is subject to a cap related to their Central Provident Fund (CPF) contributions. Specifically, if the taxpayer’s total compulsory and voluntary CPF contributions for the year are less than S$5,000, they can claim a relief. The amount of relief claimable is the lowest of the following three amounts: (1) the difference between S$5,000 and the actual CPF contribution, (2) the actual insurance premiums paid, or (3) 7% of the capital sum assured. In this scenario, Mr. Lim’s CPF contribution is S$4,500. The first limit is S$5,000 – S$4,500 = S$500. The second limit is the premium paid, which is S$1,200. The third limit is 7% of S$100,000, which is S$7,000. Comparing these three figures (S$500, S$1,200, and S$7,000), the lowest amount is S$500. Therefore, the maximum life insurance relief Mr. Lim can claim is S$500.

A policy loan is essentially an advance on the policy’s cash value. The policy owner is required to pay interest on this loan. If the interest is not paid, it is added to the loan principal and continues to accrue interest, a process known as compounding. The most critical risk associated with a policy loan arises when the total outstanding debt, which includes the original loan amount plus all the compounded interest, exceeds the policy’s accumulated cash value. In such a circumstance, the insurer is entitled to terminate the policy completely. This means the policyholder loses all coverage and any premiums previously paid will not be refunded. While it is true that any claim or surrender payout would be reduced by the loan amount, this is a standard consequence and not the ultimate risk of termination. The insurer will not convert the debt into a separate personal loan, nor is the primary consequence a suspension of bonus declarations; the fundamental risk is the forfeiture of the entire policy.

Under Section 57 of the Insurance Act (Cap. 142), a person effecting a life policy on the life of another must have an insurable interest in that life at the time the insurance is effected. The Act presumes insurable interest for specific relationships, such as a person’s spouse, or their child or ward who is under the age of 18. A 25-year-old nephew does not fall into these categories of presumed interest. Therefore, insurable interest must be established through other means, typically a financial dependency or obligation. In this scenario, the substantial business loan creates a clear financial relationship where the proposer (Mr. Chen) stands to suffer a financial loss upon the death of the life insured (his nephew). The underwriter’s primary task is to verify the existence and the exact amount of this loan at the policy’s inception. This is because the Act stipulates that the policy monies paid shall not exceed the amount of that insurable interest at that time. While the nephew’s health and business prospects are crucial for general risk assessment, and the potential for policy replacement is a regulatory concern under MAS Notice 318, the fundamental validity of this specific third-party contract hinges on proving a quantifiable insurable interest.

This question assesses the understanding of how an Acceleration Benefit Critical Illness Rider functions in relation to a basic life insurance policy, a key concept under the CMFAS Module 9 syllabus. An acceleration benefit, as its name implies, provides for the pre-payment or ‘acceleration’ of the death benefit from the basic policy. When a claim is made on a 100% acceleration rider, the full sum assured of the basic policy is paid out to the life insured. This payment effectively exhausts the policy’s value, leading to the termination of the entire policy. Consequently, no further benefits, including the death benefit, will be payable in the future. This is distinct from an ‘Additional Benefit’ rider, where the rider’s sum assured is paid out in addition to the basic policy’s sum assured, leaving the basic policy intact. In this scenario, because the rider is a 100% acceleration type, the S$300,000 payout for the critical illness is considered the full and final benefit from the policy, which then ceases to exist.

A premium holiday is a feature in some regular premium Investment-Linked Policies (ILPs) that allows the policyholder to temporarily stop paying premiums. However, the policy does not simply remain in force for free. During this period, the insurer will deduct the costs of insurance coverage (mortality and other benefit charges) and administrative fees by selling off the existing units from the policy’s sub-funds. Therefore, the length of time the premium holiday can be sustained is entirely dependent on the accumulated cash value of the units in the policy. If the value of the units is high, it can cover the charges for a longer period. Conversely, if the unit value is low or if market performance is poor, the units will be depleted more quickly, potentially causing the policy to lapse. This concept is a critical aspect of understanding the risks and features of ILPs as covered in the CMFAS Module 9 syllabus.

Under the Insurance Act (Cap. 142), when a policy owner makes an irrevocable nomination, a trust is created over the policy benefits in favour of the named nominee(s). This means the policy owner, as the settlor of the trust, no longer has the absolute right to deal with the policy in a manner that could undermine the vested interests of the beneficiaries. An assignment, whether absolute or conditional, involves the transfer of ownership rights of the policy. Therefore, to validly assign a policy that is subject to an irrevocable nomination, the policy owner must first secure the explicit written consent of all irrevocable nominees. Simply completing the insurer’s procedural forms is insufficient as it does not address the underlying legal trust. The nature of the assignment being conditional does not alter this requirement, as the transfer of rights, even temporarily, is still a dealing that affects the nominee’s position. The law provides this protection to ensure the interests of the irrevocable nominee are safeguarded.

The calculation to determine the number of units purchased involves two main steps, as outlined in the principles of Investment-Linked Life Insurance Policies (ILPs). First, the portion of the premium designated for investment must be identified. This is done by applying the premium allocation rate to the gross premium paid. In this scenario, the gross annual premium is S$6,000 and the first-year allocation rate is 90%. Therefore, the amount allocated for purchasing units is S$6,000 × 90% = S$5,400. The remaining 10% (S$600) is not invested and is used by the insurer to cover initial expenses. Second, this allocated amount is used to purchase units at the prevailing offer price. The number of units is calculated by dividing the allocated amount by the offer price per unit. With an allocated amount of S$5,400 and an offer price of S$1.80, the number of units purchased is S$5,400 / S$1.80 = 3,000 units. This calculation is fundamental to understanding how an ILP’s value is built up from premium payments, a key computational aspect covered in the CMFAS M9 syllabus. It is important to note that this calculation determines the initial number of units credited; subsequent charges like mortality and policy fees are typically deducted by cancelling units from the account.

Under the Singapore Income Tax Act (Cap. 134), the calculation of taxable income follows a specific sequence. First, ‘Assessable Income’ is determined by subtracting allowable expenses and approved donations from the total income. ‘Chargeable Income’ is then derived by deducting personal reliefs from the assessable income. In this scenario, the S$5,000 for business software is an allowable expense as it is incurred for income-producing purposes. The S$2,000 donation to an approved institution qualifies for a 2.5 times deduction (2.5 x S$2,000 = S$5,000), which is subtracted to arrive at the assessable income. Finally, the S$8,000 CPF contribution is a personal relief, which is deducted from the assessable income to determine the final chargeable income upon which tax is levied. Other approaches incorrectly mix these distinct categories of deductions and reliefs or misapply their specific treatments.

The core principle being tested is the distinction between a nominal interest rate and an effective interest rate, which is influenced by the frequency of compounding. The nominal rate is the stated annual rate, while the effective rate is the actual rate earned after accounting for the effect of compounding within the year. When interest is compounded more frequently (e.g., quarterly instead of semi-annually) on the same nominal rate, interest is earned on previously accrued interest more often. This leads to a higher effective annual rate and, consequently, a larger future value. Let’s calculate the effective annual rate (EAR) for both funds: – **Fund A (Semi-annual compounding):** The 6% annual rate is applied as 3% every six months. The formula for the EAR is \((1 + \frac{i}{n})^n – 1\), where \(i\) is the nominal rate and \(n\) is the number of compounding periods per year. For Fund A, EAR = \((1 + \frac{0.06}{2})^2 – 1 = (1.03)^2 – 1 = 1.0609 – 1 = 6.09\%\). – **Fund B (Quarterly compounding):** The 6% annual rate is applied as 1.5% every quarter. For Fund B, EAR = \((1 + \frac{0.06}{4})^4 – 1 = (1.015)^4 – 1 \approx 1.06136 – 1 = 6.136\%\). Since Fund B has a higher effective annual rate (6.136%) compared to Fund A (6.09%), it will generate a greater return on the initial investment over one year. This concept is a fundamental part of the computational aspects of investment-linked policies as outlined in the CMFAS Module 9 syllabus.

A detailed explanation of the answer and reasoning. The core issue in this scenario is the mismatch between the product’s intended duration and the client’s available time horizon. Regular premium ILPs are structured as long-term plans, primarily because significant charges (like allocation fees and administrative costs) are typically levied in the early years of the policy. These initial costs can erode the investment value, and it often takes several years for the policy’s investment returns to overcome these charges and generate growth. For Mr. Lim, who plans to retire in just two years, this short time horizon means he is highly unlikely to see a positive return and may even lose a portion of his capital due to the front-loaded fees. His ability to sustain premium payments after retirement is also a critical concern. While bearing full investment risk is a valid characteristic of ILPs, it is a general risk for any market-linked product, not the most specific reason for unsuitability in this case. The ineligibility for CPFIS is a factual constraint but may not be relevant if Mr. Lim intends to use cash. The description of premiums being pooled into a general Life Sub-fund is characteristic of a traditional policy, not an ILP, which offers distinct sub-funds with specific mandates. Therefore, the most critical factor making the regular premium ILP unsuitable is the conflict with his short time horizon, as per the principles of financial advisory outlined in the MAS Notice FAA-N16 and the general suitability guidelines for ILPs.

A detailed explanation of the non-forfeiture options is crucial here. When a policyholder ceases premium payments on a policy with accumulated cash value, they are entitled to certain benefits. The Extended Term Insurance option allows the policyholder to use the entire net cash value as a single premium to purchase term insurance. The death benefit under this option is typically the same as the original policy’s face amount, but the coverage lasts for a specified period, determined by the amount of cash value available, the insured’s attained age, and mortality rates. This directly addresses the client’s primary objective of maintaining the maximum possible death benefit for a finite period without further payments. In contrast, converting to a reduced paid-up policy would provide lifelong coverage but at a significantly lower sum assured. Surrendering for cash would terminate all life protection, which contradicts the client’s goal. An Automatic Premium Loan (APL) keeps the original policy in force by borrowing against the cash value, but this creates a debt that accrues interest and reduces the death benefit, and it is not a permanent solution to stop payments as the cash value will eventually be depleted. Therefore, for maximizing the coverage amount for a limited time, Extended Term Insurance is the most suitable choice as per the principles governing policyholder rights under the Insurance Act.

Under the Insurance Act and the associated Insurance (Nomination of Beneficiaries) Regulations 2009, a policy owner can make a revocable nomination. This type of nomination can be superseded by a subsequent valid Will. However, for the Will to effectively revoke the prior nomination, it must contain specific information about the insurance policy, as prescribed by the regulations. A general clause in a Will that bequeaths ‘all insurance policies’ to a beneficiary, without identifying the specific policy, is insufficient to override a pre-existing revocable nomination. In this scenario, because Mr. Lim’s Will lacked the required specific details of the policy, it did not legally revoke the earlier nomination made in favour of his sister, Grace. Therefore, the insurer must act on the last valid instruction it has on record for that specific policy, which is the revocable nomination. The proceeds are thus payable to the nominated beneficiary, Grace.