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  • Writer's pictureTeresa Lee

How Insurance Trust avoid squandering of your money

Updated: Jul 11, 2023

Having secured by life insurance policy and the loved one as beneficiary is a good way of giving protection in the event of unwanted occurrence. It is not a fool-proof measure but a good and protective step against uncertainties such as if a spouse (who is the sole beneficiary) unexpectedly passed on, beneficiaries who squander away their money or young beneficiaries who are minors at the point of distribution.

To avoid these situations and misuse of money by the nominees, set up an Insurance Trust to protect your insurance proceeds and ensure it is used according to your written instructions for your named beneficiaries.

Benefits of Insurance Trust

1) Funds distributed according to your instructions

This is to ensure the beneficiaries receive payouts for specific purposes such as education fees, and even opt for staggered distribution rather than lump sum release.

2) Quick disbursements

If those policies are under Insurance Trust, they do not form part of your estate. Therefore your beneficiaries not required to wait for Grant of Probate or Letters of Administration but to enjoy quick access to payouts.

3) Hassle & Stress-free for your beneficiaries

As your Trustee, we will carry out the steps necessary to deal with the insurer so your beneficiaries do not have to handle the hassles of claims.

4) Avoid the legal limitations of insurance nomination

By setting up Insurance Trust, you can name any person or organisation as your beneficiaries as you are not subject to the conditions of insurance nomination laws.

5) Reserve all right to amend anytime

At any point during your lifetime, you can change the instructions in your Trust, to reflect your latest intentions.

How to set up Insurance Trust?

Assign your insurance policy(ies) to Rockwills Trustee Berhad

Provide written instructions to prepare your Trust Deed for Execution

You - Fund your medical and living expenses from claims

Your loved ones

a) Children - Pay for education and living expenses

b) Spouse/Parents - Pay for medical and living expenses

c) Debts & Estate Administration - Pay off any debts and estate administration expenses

d) Others - Donate to charities or fund any of your interests

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