Think about your family, think nomination

When Malaysians buy their air ticket online – AirAsia, MAS, FireFly or even Tiger Airways,  most purchases are auto attached with a Travellers’ Personal Accident (TPA) and pricing would be computed with the TPA attached, unless and until you click the TPA out of your radar. We have no real issue with this – by the way, getting a TPA while you are travelling is great, at least you or your personal representatives get some form of compensation if anything untowards happened.

However, what those airline ticket dispensation portals don’t tell you clearly and in no uncertain terms is that you need to do a NOMINATION on your TPA. When you nominate this means you are putting a nominee to receive the payment in any event you are gone…. and the advantage is that your nominee would be able to secure the insurance payment within the shortest possible time. But in most cases you and I are usually not aware of this requirement – YOU JUST NEVER GET THIS DONE!

WHAT HAPPENED IF YOU DID NOT MADE ANY NOMINATION?

Without a nomination, your insurance company is not obligated to release the policy money until your loved ones obtain either of these documents, which may take several years.

When a nomination is not made, the insurance company will only pay the policy moneys to the person who produces the Grant of Probate or Letters of Administration or Distribution Order. However, the insurance company may at its discretion disburse the policy moneys to a person (or the claimant) without the relevant documents under the following circumstances:

1. If the claimant is the spouse, child or parent of the policy owner
2. If the claimant is someone who is entitled to receive the Grant of Probate or Letters of Administration or Distribution Order based on the satisfaction of the insurance company. This applies in the event the policy owner has no spouse, child or parent still living.

The person receiving the policy moneys is only receiving it as an executor and must distribute it in accordance to the will of the deceased or applicable laws of distribution.

There should not be  much of a problem for item 1, save where you have more than one family or that there are unlikely disputes surfacing when you are gone. However expecting the insurer to settle in accordance to 2 may be far-fetched. Nevertheless, it is best practice to get the nomination done no matter how….

Perhaps it is also good to note the extra information or rather the differences between nomination contains within the Syariah principles and those that are not: