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Press Releases

Choosing a minor as your beneficiary

11 Feb 13
WHAT YOU NEED TO KNOW

Life insurance protects your family if you die and ensures that they will be able to maintain their lifestyle after you are no longer here. Your Clientèle Life insurance policy does this by paying a death benefit to your beneficiary.


When you apply for your new Clientèle Life policy, you have to consider the type of policy you need and what the purpose of that policy will be. You also need to decide who the beneficiary will be.


Choosing a beneficiary is - very important as this decision means that the person that you have selected will receive the money from your policy. You can nominate any person to be the beneficiary of your Clientèle Life policy, but for now we will focus specifically on choosing a child as your beneficiary and how this nomination will impact the eventual payment.


In South Africa, a child who is not yet 18 years old is a minor. Below is a list of questions and answers that will help you to understand the implication of nominating a minor as a beneficiary.


What happens if my Beneficiary is a minor?

The law prevents Insurance Companies from paying the proceeds of a policy directly to a child who is not yet 18 years old. The funds owing to a minor beneficiary must therefore be paid into a trust so that the child can eventually benefit from this money when he / she is old enough. At Clientèle Life we make use of a Company called Fairheads Trust.


What happens to the money once it is paid to Fairheads Trust?

Fairheads will administer the trust together with the legal guardian of the child. This means that if you want the proceeds of your policy to help with the upbringing of your child, then a guardian must be appointed to look after the child until he/she is no longer a minor. Fairheads will work with the guardian and agree to what the needs of the child’ will be. The trust that is set up will be structured to provide this care until your child is 18 years old or until the money has been used up. Any money that is still available will be paid to the child once they turn 18 years old.


What if I have more than one child as a beneficiary?

The benefit of the policy will be paid according to your specifications. If you have three children and you want 50% to be paid to the eldest child and the remaining 50% to be divided between the other two children, this can be specified by simply calling our call centre and a consultant will gladly assist you to make this change, alternatively your request can also be specified in a letter and the Clientèle Life administration team will affect any changes.


What happens if I have a trust of my own?

If you already have a trust set-up for your child and you want the money to be paid to this trust, then you have to nominate the trust as the beneficiary.


If I don’t want to have the money paid to a trust?

If you do not want the money to be administered by a trust you need to nominate a responsible adult person to be the beneficiary. This could be for example your husband or wife or your mother or father.


How do I change my beneficiary?

If you want to change your current beneficiary nomination, you can do so by simply providing the Clientèle Life with your request in writing. This type of change must be done in writing so that we can keep a record of your request and assist your beneficiary more efficiently once a claim occurs. To make it easier for you, a change of beneficiary form may be completed and as soon as the requested changes have been made, Clientèle Life will confirm these changes by sending your new policy documents. On receipt of the new documents, you will need to check that the details are correct. REMEMBER, we may only pay the person whose details appear on the latest version of your policy document and as it appears on our system. It is therefore extremely important that you always read your policy document with all the relevant terms and conditions to avoid additional trauma for your family at claim stage.


For more information on the Clientèle Life product offering, click here.




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