Report No. 66
VIII. Summary of Recommendations in This Chapter
8.60. Summary of recommendations in this chapter.-We may summarise the recommendations made in this Chapter as follows:-
(i) Endowment policies should be brought within section 6 by a clarificatory amendment.1
(ii) The insurers should adopt, in the policy of life insurance, the formula used in section 6, where the assured intends that2 section 6 should be attracted. Further, the insurance Act should be amended for the purpose.3
(iii) Children4 should be brought within the benefit of section 6.
(iv) Section 6 should be extended so as to allow contingent trusts.5
(v) The policy-holder or his heir should be the trustee,6 where no one is appointed as a trustee.
(vi) Where, in respect of the moneys payable under the policy of insurance, the insured has created a trust under section 6 of the Married Women's Property Act, 1874, and also made a nomination, then, the nomination, whether or not it refers to section 39, shall be disregarded.7 The Insurance Act should be amended for the purpose by adding a second proviso to section 39(7) thereof.
(vii) Where the policy effected by a person is not, at the time when it is effected, expressed on the face of it to be for the benefit of any of the persons mentioned in sub-section (1), the insured should have a right too at any time subsequently during the subsistence of the policy, to create the trust.8
(viii) The English Act contains the words "shall create a trust in favour of, the objects therein named." These words make the trust more definite than merely "deeming" it to be a trust as in section 6. This wording should be adopted.9
(ix) Under section 6, creditors would be entitled, in case of fraud, to a right against the (entire) proceeds of any such policy, though the word "entire" is not used. Instead, the creditors should be entitled to receive, out of the moneys payable under the Policy, a sum equal to the premiums so paid.10
(x) In section 6(1), the words "so long as any object of the trust remains" are ambiguous. Opportunity should be taken' of stating the position more definitely, in this regard. A re-draft is recommended.11
One result of the amendment recommended will be that, subject to any contrary intention, a named wife will take an absolute vested interest in the policy so that, if she dies before her husband, it will form part of her estate.11
1. Para. 8.22, supra.
2. Para. 8.30, supra.
3. Para. 8.42, supra.
4. Para. 8.33, supra.
5. Para. 8.46, supra
6. Para. 8.50, supra.
7. Para. 8.54, supra.
8. Para. 8.55, supra.
9. Para. 8.56, supra.
10. Para. 8.57, supra.
11. Para. 8.58, supra.