You will be able to explain why CPF and insurance nominations matter and how to make them.
Wei Ling found in lesson 5.4 that she has no CPF nomination. Her first reaction was that it did not matter much. She is 29 and healthy, and she plans to make a will one day, which she assumed would cover everything.
It would not. Her CPF savings, S$57,000 in the example, are the largest thing she owns, and a will cannot pass them on. The same is true of any insurance policy that carries a nomination. These two kinds of nomination decide where a large share of most young people's money goes, and they take minutes to set up.
CPF savings are not part of your estate in the usual sense, so your will does not cover them. A CPF nomination is the instruction that says who receives your CPF savings when you die, and in what shares. You can name one person or several, and they do not have to be family.
When a member who has made a nomination dies, the CPF Board pays the savings to the nominees directly. That route is relatively quick, and your family does not have to go to court first.
If you die without a CPF nomination, your savings go to the Public Trustee's Office. Your family has to come forward and apply, and the Public Trustee then distributes the money according to the law: the Intestate Succession Act for non-Muslims, or Muslim law for Muslims. That process takes longer, and the shares are set by law, whatever you would have wanted.
For Wei Ling, single and without children, the law would send her CPF to her parents. That may be what she wants. But if she wanted part of it to go to Jun before they marry, or to a sibling, only a nomination could do it.
Insurance policies can carry their own nomination, made with the insurer under the Insurance Act. If a policy has none, the payout goes into your estate and follows your will, or the intestacy rules if you have no will, which means the family waits for the estate to be sorted out.
There are two kinds of nomination. A trust nomination puts the payout in trust for the people you name. It can generally only name your spouse or children, and once it is made you cannot change it or use the policy freely without the consent of the nominees or the trustee. In return, the money goes to them and is usually protected from your creditors. A revocable nomination can name anyone and can be changed or cancelled whenever you like, but it gives the nominees less protection.
Which one suits a policy depends on who you want to protect and how fixed you want the arrangement to be. Each insurer has its own forms and its own rules on which policies allow which kind, and some group policies through an employer work differently again. Ask your insurer which kind each of your policies has, or can have, before you choose. Muslims should also check how nominations apply to them, with the insurer and the Syariah Court.
You can make a CPF nomination online. Log in to cpf.gov.sg with Singpass, find the nomination section and follow the steps. You will be asked to name your nominees and their shares, and you will need witnesses; the website sets out how many and who can act as one. You can also make a nomination in person at a CPF service centre. Once it is done, your CPF dashboard shows the date it was made.
A nomination is not a one-off job. Review it whenever your family changes. Three events matter most. Marriage cancels an existing CPF nomination for non-Muslim members, so a nomination made while single has to be made again after the wedding. Divorce does not cancel it, so an ex-spouse can stay as your nominee until you change it. And a new child is not added automatically.
Check how each of these applies to you on the CPF website, because the rules can differ between members. The same goes for insurance nominations: after a marriage, a divorce or a child, look at each policy and confirm the names on it still match what you want.
Wei Ling makes her CPF nomination online, naming her parents in equal shares, and diarises a reminder to make a new one after the wedding. Then she turns to her insurance. She has two policies, and she has no idea whether either one names anyone.
You are probably in the same position. Have your CPF dashboard open in one tab and your insurers' apps or policy documents in another, and look for the nomination section on each.
Check your CPF nomination status and the nomination on each insurance policy, and note any that are missing or out of date.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).