Facility-of-Payment Clause Law & Legal Definition


In Insurance law, facility-of-payment clause is an insurance policy provision. This provision allows the appointment of a person to receive payment from the insurer on behalf of the beneficiary. This provision was designed to help the benefit payments when a lack of clarity exists as to the actual beneficiary. The facility-of-payment clause enabled prevention of potential litigation against the insurer. In Trusts law, facility-of-payment is a trust provision allowing a person who owes money to an incapacitated trust beneficiary to discharge the debt by paying the sum owed to the custodial trustee.