The insured may name anyone as nominee

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SIBU: The insured has every right to name anyone as a nominee so long as the nominee commands an insurable interest, a senior insurance agent here said.

He said those with insurable interests included spouses, parents or children, employers or employees, and debtors or creditors.

“A nominee with insurable interests is depicted as one who will suffer both mentally, emotionally, and financially when the insured dies.

“In the case of spouses, parents, and children it is a straight forward case when it comes to the insurance claim.

“However, in the case of debtors or creditors and employers or employees, proofs of their legality to be named as nominees must be there when the needs arise,” explained the unnamed agent.

He was commenting on the case of 39-year-old Paw Gin Bin who was initially thought to be a victim of a hit-and-run accident on a remote road in Sibu Jaya at 6.30pm last Sept 26.

Suspicions over his death surfaced after family members of Paw, an odd job worker who also sold lottery result slips, discovered that he had bought insurance policies with compensations totalling RM700,000 a few months earlier and had named a stranger as his nominee.

After getting the court order, police exhumed his body and the one-hour post mortem at Sibu Hospital mortuary on Jan 30 suggested Paw’s chest had been run over by the tyre of a car.

“Under the Insurance Act 1996, a beneficiary or nominee is a person who is named in the policy and he can receive the policy monies from the insurer and give a proper discharge,” the agent said.

“He may or may not be the real `’beneficiary’ of the policy benefits, depending on who he is and whether additional arrangement has been made to ensure that he also receives the money beneficially.”

Asked whether an odd-job labourer is qualified to buy insurance policies worth RM700,000, the agent said it was something for the insurance company to decide.

“Different insurance companies have different policies when it comes to dealing with a policy holder who buys a life insurance policy exceeding RM500,000.

“Normally, an insurance company would check the background of the policy holder, his or her annual income, and the eligibility to buy large sums of life or personal accident insurance policies.”

He said an insurance company would take into consideration the annual income of the worker and multiply the annual income by five years.

For instance, if the worker earned a monthly salary of RM2,000 and in five years’ time, his total income would be RM120,000.

“And in such case, then an insurance company would normally allow the policy holder to buy any insurance policy not exceeding RM120,000.

“However, that still has to depend on his age and the different insurance companies’ underwriting guidelines as some may opt to use 10 years total income as benchmark.”

The agent also mentioned that it was an offence to buy two or more insurance policies at the same time unless the insurance holder disclosed it to the insurance company that they already had multiple insurance policies before buying another one.

“If they don’t disclose it to the insurance company and in the event that any future claim arises, due either to accidental or natural death, then the insurance company has every right to repudiate their claims.”