A specifically identified individual or entity formally designated in insurance policy documentation to receive death benefit proceeds, providing clarity and potentially expediting payment while avoiding estate complications. Nomination strength varies from binding (mandatory payment) to non-binding (guidance only) depending on policy type and documentation.
A nominated beneficiary is a person or entity formally named in your policy documentation to receive death benefit proceeds. Nomination strength ranges from binding (the insurer or trustee must pay) to non-binding (guidance only), depending on the policy type.
You complete a beneficiary form naming each individual or entity with a percentage allocation if there is more than one. Nominations are generally binding on the insurer once identity and eligibility are verified.
You can name:
Super-based nominations are more complex under the SIS Act.
Binding Death Benefit Nominations (BDBN) legally compel the trustee to pay your nominated beneficiaries. To be valid, the BDBN must be:
Standard BDBNs lapse every three years unless renewed, although non-lapsing BDBNs are increasingly available.
Non-binding nominations only guide the trustee. The trustee keeps discretion to pay other eligible beneficiaries if circumstances warrant.
Under the Tax Act and SIS Act, eligible super beneficiaries are:
Outdated or invalid nominations have caused real problems:
The FSC and ASIC encourage regular nomination review, especially after marriage, divorce, births, deaths of previously nominated people, or changes in dependants' financial circumstances.
A 52-year-old makes binding nomination for three adult children equally (33.3% each) in $800,000 super policy. Upon death, trustee must split benefit three ways despite one child's severe financial hardship, as binding nomination removes trustee discretion.
A couple each nominates the other as beneficiary in standalone policies. First spouse dies, and survivor receives $600,000 proceeds within three weeks, avoiding the 6-12 month probate process the estate undergoes for other assets.
A member makes binding nomination for de facto partner, but relationship ends before nomination lapses three years later. Upon member's death during lapsed period, trustee exercises discretion to pay adult children rather than former partner, despite nomination on file.
Get indicative insurance quotes from 9+ leading Australian insurers.
Explore related insurance concepts