Can I Distribute My Insurance Proceeds by Way of a Will?


Typically, when a person passes away with a will, the person’s estate will be distributed to the beneficiaries according to the will, by the named executor(s) of the will.


However, when you have a named nominee under your life insurance policy, depending on whether the nomination is a trust nomination or a revocable nomination (see below), the insurance proceeds may or may not be distributed according to your will, since there is a named nominee who is entitled to receive the proceeds.


Should you wish to distribute your insurance proceeds via a will, you may have to override your insurance nomination (see below), and the possibility of it again depends on whether you have made a trust nomination or a revocable nomination.


On the other hand, if you have not nominated a nominee or have not provided for the distribution of the insurance proceeds in your will, the insurance company may pay the insurance proceeds to any proper claimant without the production of any Grant of Probate or Grant of Letters of Administration.


The proper claimant may be the executor of your will, or your immediate family member such as your spouse, parent, child, sibling, nephew or niece.


If the proper claimant cannot be determined, the insurance company may then request for a certified true copy of the Grant of Probate or the Grant of Letters of Administration before the insurance proceeds will be released to your estate.


In this case, the insurance proceeds will undergo probate proceedings and form part of your assets, where the court will decide the rightful recipient. If you have a will, the insurance proceeds will be distributed according to the will. If you do not have a will, the insurance proceeds will be distributed according to the intestate law.