If the beneficiary is under 18 years old, a guardian arranged by the policyholder will receive and manage the insurance payout on behalf of the beneficiary until he/she comes of age. If the guardian is negligent or manages the funds improperly, abusing the insurance proceeds, it can lead to the minor beneficiary not receiving proper care and financial support.
What can be done to avoid this?
Setting up an insurance trust can avoid the above risks and flexibly meet your needs in providing for your children’s future. The trustee will manage the relevant trust assets (i.e. insurance proceeds) or distribute them to designated trust beneficiaries according to the terms of the trust deed signed by the settlor. Making the most appropriate arrangements for them.
This is where an insurance trust can help:
- Designate beneficiaries (including unborn descendants)
- Specify the distribution method and timing of insurance proceeds
- Specify the conditions that beneficiaries must meet (such as reaching a certain age or completing their education)
If you want to learn more about insurance trusts,
please browse other articles on our website or contact us.
