Policy Ownership Requirements

Please note the following regarding policy ownership:

  • A policy can be owned by one person or jointly owned by two or more people.
  • Each policy owner must be at least 16 years of age.
  • All policy owners must consent to being a policy owner therefore it is not possible to add a policy owner (beneficiary) without their knowledge and consent.

Important

  • Policy owners can be added or removed at any time by completing a Change of Ownership Form (see below).
  • Any changes to the policy, including any change in ownership, or cancelling the policy, must be approved by all policy owners at that time.
  • If you are not a policy owner, or cease to be a policy owner, you will not have any rights over the policy at all, including the right to access any information about the policy, even if you are insured under the policy.

Claim Payments

For AIA Living policies (e.g. Life Cover, Critical Conditions, Progressive Care, Income Protection, Total Permanent Disablement, Family Protection), AIA will pay all benefits to the policy owner, or to the policy owner’s estate.

If more than one person owns the policy then AIA will pay all benefits to the policy owners jointly or as they jointly direct, or to the survivor(s) of the policy owners. This is specified in section 1 of the AIA Living Umbrella Wording which forms part of the policy wording.

For example, upon the death of the person insured, any claim proceeds from a Life Cover or Family Protection insurance policy would be paid out as follows:

  • If the person insured is the sole policy owner, the proceeds would be paid to the deceased person’s estate.
  • If the policy is owned by one person who is not the person insured, the proceeds would be paid directly to the policy owner, bypassing probate and the estate of the deceased person. It should be noted that if the policy owner dies at the same time as the person insured, any proceeds would be paid to the estate of the policy owner.
  • If the policy is jointly owned, the proceeds would be paid directly to the surviving policy owner(s), bypassing probate and the estate of the deceased person.

Life Insurance Beneficiaries

The ownership of your life insurance policy not only determines the person to whom any benefit is paid, but by law it governs the claims process which must be followed, and therefore the time required to pay a claim.

If your life insurance policy is owned either jointly or solely by another person (such as your partner), then on your death the insured amount is paid directly to the other person, without the need for Probate or Letters of Administration to be granted by the High Court. This is particularly helpful if the primary purpose of your policy is to provide for the financial upkeep of one or more of your dependants.

If, on the other hand, your life insurance policy is owned solely by yourself, then the claim proceeds must be paid to your estate. This cannot occur until the High Court has granted Probate or Letters of Administration, a process which can at times take several months to complete and delay any intended payment to one or more of your dependants. However, it may well be your intention (for whatever reason) that the claim proceeds are to be paid to your estate and therefore disbursed according to the terms of your will.

If you die without leaving a will the claim proceeds may be disbursed in a way that is entirely at odds with what you intended. In the first instance, a grant of Letters of Administration must be made by the High Court to a person who will act as the administrator of your estate. Your estate must then be dealt with in accordance with section 77 of the Administration Act 1969, which distributes your estate according to the family members who survive you. For example, if you have a spouse and children, your estate is disbursed in the following way:

  1. Your personal chattels (as defined in section 2(1) of the Administration Act 1969) pass to your spouse;
  2. The first $155,000 (plus interest) of your estate passes to your spouse;
  3. One-third of the remainder of your estate passes to your spouse, and two-thirds must be held in statutory trust for the benefit of your children.

It is therefore important that the ownership of your policy reflects your intentions as to how any claim proceeds are dealt with, and to whom they are paid.

Change of Ownership Form

Change of Ownership Form PDF

Changing the Ownership of Your Policy

To change the ownership of your policy:

  • Download and print the Change of Ownership Form.

  • Complete all relevant sections of the form. It is very important that you enter your policy number and date the form.

  • If any of the current policy owners are to remain as policy owners, their details must be included again in section B New and remaining owners.

  • All signatures must be witnessed. Anyone aged 16 or above who is not connected to the policy can be a witness.

  • All current and new policy owners must provide a copy of some government-issued identification (such as a Driver Licence or Passport) so that AIA can verify their signatures. Witnesses do not need to provide identification.

Important

For the Change of Ownership Form to be accepted as valid by AIA, it must be printed and signed by hand in ink (i.e., not electronically, not by tracing your signature on-screen, and not by pasting an image of your signature on the form).

When you have completed the form, you can either email a scanned copy (or a clear photo of each page) of the form to us at service@kiwicover.co.nz or post the form to:

  • AIA New Zealand
    Private Bag 92499
    Victoria Street West
    Auckland 1142

Advice

Please note that we are unable to provide you with any advice as to who should be the policy owner or owners of a policy, or what the implications of your choice of policy owner might be. For this we recommend that you obtain the advice of a solicitor, particularly if you are unsure as to what to do or what you ought to do. A solicitor would also be able to advise you on the effects of ownership in relation to your will.