Nomination of Beneficiary

In general terms to Nominate a Beneficiary on your Superannuation account or Life Insurance policy is to instruct the company to pay out fund as per your wishes in the event of your death.

With Life Insurance policies its rather simple whoever you nominate is generally the one who will get the proceeds of the policy.

However with Superannuation accounts it can be a little different

The first type is Non Binding Nominations, this is traditionally the most common, and you instruct the trustee to consider your wishes in the event of your death, however the Trustee of the superannuation fund is NOT bound by your nomination. Its a rare event that they do not follow your wishes but as the family unit gets more complex with children, devorced partners, and aging parents being looked after by family, this may become a bigger issue in the future.

Binding Nominations, are becoming more the norm for people wishing to nominate beneficiaries to their accounts, and this brings Superannuation accounts in line with Life Insurance policies. Here you nominate the persons that you wish and the Superannuation Trustee is bound by your nomination regardless of any other complications.

Another variation is does the nomination have a time frame or is it Non Lapsing?