Insurable interest required for life insurances
146.—(1)  A life policy insuring the life of a person which is issued by a licensed insurer is void unless —
(a)the person effecting the insurance has an insurable interest in the life which is insured at the time the insurance is effected;
(b)the life which is insured is that of —
(i)the person effecting the insurance;
(ii)his or her spouse at the time the insurance is effected;
(iii)his or her child or ward under the age of 18 years at the time the insurance is effected; or
(iv)any other person on whom the person effecting the insurance is, at the time the insurance is effected, wholly or partly dependant; or
(c)the life policy is one in respect of which all of the conditions referred to in subsection (3) or (4) are satisfied.
[3/2009; 11/2013]
(2)  Where subsection (1)(a) applies, the policy moneys payable under the life policy must not exceed the amount of the insurable interest at the time the insurance is effected.
[3/2009]
(3)  Section 5 of the Civil Law Act 1909 and section 151 do not apply to a life policy, and a life policy is not void, if all of the following conditions are satisfied:
(a)the life which is insured is that of the settlor of a trust;
(b)the person effecting the insurance is the trustee of the trust;
(c)any beneficiary of the trust —
(i)has an insurable interest in the life of the settlor at the time the insurance is effected; or
(ii)is —
(A)the settlor’s spouse at the time the insurance is effected;
(B)the settlor’s child or ward under the age of 18 years at the time the insurance is effected; or
(C)any other person on whom the settlor is, at the time the insurance is effected, wholly or partly dependant;
(d)the settlor consents in writing to the effecting of the insurance before it is effected.
[3/2009]
(4)  Section 5 of the Civil Law Act 1909 and section 151 do not apply to a life policy, and a life policy is not void, if all of the following conditions are satisfied:
(a)the life which is insured is that of a beneficiary of a trust (called in this subsection the relevant beneficiary);
(b)the person effecting the insurance is the trustee of the trust;
(c)any beneficiary of the trust —
(i)has an insurable interest in the life of the relevant beneficiary at the time the insurance is effected; or
(ii)is —
(A)the relevant beneficiary’s spouse at the time the insurance is effected;
(B)the relevant beneficiary’s child or ward under the age of 18 years at the time the insurance is effected; or
(C)any other person on whom the relevant beneficiary is, at the time the insurance is effected, wholly or partly dependant;
(d)the relevant beneficiary consents in writing to the effecting of the insurance before it is effected.
[3/2009]
(5)  Subsections (1), (2), (3) and (4) apply to a life policy regardless of whether the proper law of the life policy is the law of Singapore.
[3/2009]
(6)  In this section, “insuring the life of a person” means insuring the payment of money (or the equivalent) on that person’s death or on the happening of any contingency dependent on the termination or continuance of that person’s life, and includes granting an annuity to commence on that death or at a time to be determined by reference thereto or to any such contingency.
(7)  Insofar as in the case of any life policy the policy moneys do not consist wholly of a cash payment due on the death in question, the limit under this section on the amount to be paid must be applied by reference to the value of the right to the policy moneys immediately after the death or the happening before the death of any event on which they become payable.
(8)  Subsections (1)(a) and (b), (2), (6) and (7) do not affect policies issued before 1 January 1967.
[3/2009]
(9)  Subsections (1)(c), (3), (4) and (5) do not affect policies issued before 1 March 2009.
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[3/2009]