A Trust Nomination allows a policy owner to create a statutory trust in favour of the beneficiaries. Only the policyowner's spouse and/or children can be nominated as the beneficiaries.
This is similar to the trust under Section 73 of the Conveyancing and Law of Property Act. The difference is that under the Insurance Act, the policy owner makes an intentional and deliberate choice to effect such a nomination by completing a form prescribed by the Insurance Act.
Once a policyowner creates a trust nomination, he will lose all rights and control over his insurance policy including the policy proceeds. However, the advantage is that the policy proceeds enjoy protection against claims from the policyowner's creditors unless there is an intention to defraud his creditors when the trust is created.
To download the nomination forms, click here.