Report No. 66
8.61. Re-drafted of section 6(1).-
In the light of the above discussion, we recommend1 that in place of section 6(1), the following sub-sections should be substituted:
"(1) A policy of insurance effected by any married man on his own life, and expressed to be on the face of it for the benefit of his wife, or of his children, or of his wife and children, or any of them, shall create a trust for the benefit of his wife, or of his children or of his wife and children, or any of them, according to the interest so expressed, and the moneys payable thereunder shall not so long as any object of the trust can be performed and remains unperformed, form part of the estate of the insured or be subject to his debts:
Provided that if it is proved that the policy was effected and the premiums paid with intent to defraud the creditors of the insured, they shall be entitled to receive, out of the moneys payable under the Policy, a sum equal to the premiums so paid.
(1A) 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 may, at any time during the subsistence of the policy2, intimate to the insurer in writing his decision that the policy should be for the benefit of his wife or of his children or of his wife and children or any of them; and, on receipt of such intimation by the insurer. The provisions of this section shall, as far as may be, apply as they apply to a policy to which sub-section (1) applies.
(1B) The insured may, by the policy or by any memorandum under his hand, appoint a trustee or trustees of the moneys payable under the policy, and from time to time appoint a new trustee or new trustees thereof, and may make provisions for the appointment of a new trustee or new trustees thereof and for the investment of the moneys payable under any such policy.
(1C) In default of any such appointment of a trustee, such policy, immediately on its being effected, shall vest in the insured and his legal representative, in trust for the persons aforesaid.
(1D) If, at the time of the death of the insured, or at any time afterwards, there shall be no trustee, or it shall be expedient to appoint a new trustee or a new trustees, a new trustee or new trustees may be appointed by any court having jurisdiction under the provisions of the Indian Trusts Act, 1882.
(1E) The receipt of a trustee or trustees duly appointed, or in default of any such appointment, or in default of notice to the insurer, the receipt of the legal representatives of the insured, shall be a discharge to the insurer far the sum secured by the policy, or for the value thereof, in whole or in part, as the case may be.
(Explanations to be added).
Explanation 1.-For the purposes of this section, an endowment policy is a policy of I insurance on life.
(This should ensure that policies under the present Act also get the benefit of the new section).
1. As to Insurance Act, see Chapter 15, infra.
2. Some alternative wording to be borrowed from the Insurance Act can be employed instead of the word "subsistence", if found to be more appropriate.
Cf. section 11 English Act of 1882.