TRUSTS IN LIFE POLICIES





  • The law allows for the automatic creation of trust in a life policy :
  • i) Civil Law Act 1956, in particular, Section 23
  • ii) Financial Services Act 2013, Schedule 10
  • The rationale is:
  • (i) to provide the married man or woman with a simple method of making some financial provisions for his/her spouse & children on his/her death ; 
  • (ii) to ensure that such a provision remains even if the insured was heavily in debt or bankrupt at the time of his/her death.

  • However, the statutory trust policy money would not be created favouring a Muslim who nominates his wife, children or parent as nominees.
  •  A nominee of a Muslim policy owner receives the policy money as an executor & must distribute the funds in accordance with Islamic Law 





 

Comments

  1. Anonymous21 July 2023 at 09:12

    Are the law similar with takaful?

    ReplyDelete
    Replies
    1. Dr Mohd Bahrin Othman24 July 2023 at 09:11

      No. Takaful falls under the Financial Islamic Services Act 2013

      Delete

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