• About
  • Advertise
  • Write For Us
  • Privacy Policy
  • Contact Us
Subscribe
Smart Investor Malaysia
Advertisement
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
      • Islamic Personal Finance
    • Alternative Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Feature
    • Regional / Global
  • ESG
  • News & Events
  • What’s News Asia
No Result
View All Result
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
      • Islamic Personal Finance
    • Alternative Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Feature
    • Regional / Global
  • ESG
  • News & Events
  • What’s News Asia
No Result
View All Result
Smart Investor Malaysia
No Result
View All Result
Advertise with Smart Investor Advertise with Smart Investor Advertise with Smart Investor
Home Personal Finance Protect Your Wealth

Tears In Heaven: Who Protects Your Insurance Money?

2 years ago
0
74
SHARES
146
VIEWS
Share on FacebookShare on Twitter

The following story is based on an actual series of events, with some names and circumstances fictionalised. Any similarity to any person’s name, character, or history is coincidental and unintentional. It is about who protects your insurance money.

Heng could not help but feel emotional as he saw little Tim at the playground without a care in the world. His thoughts were how Tim meant the world to his late sister and that she is weeping in heaven now that all the insurance monies meant for him is gone.

A cruel twist of fate had robbed Tim of what is rightfully his.

Being a single parent, June is ever careful of making sure that there is something for Tim in the event that something happens to her. She dutifully took up a life insurance policy which will serve to provide for Tim’s living expenses and education when she is not around.

Putting Ownself As Trustee, Who Protects Your Insurance Money?

But little did she realise that by naming herself as trustee in the insurance policy, she started a chain of events that made Tim an innocent victim of circumstances. Poor Tim.

Not well versed in insurance matters, she just followed the norm to name herself as trustee. June who had come to terms with her terminal illness and had got Heng’s consent to be Tim’s guardian, was at peace in her final days thinking that Tim’s welfare would be well taken care of, financially as well.

After the funeral, Heng set about to handle June’s financial matters. It was only after submitting for insurance claims did Heng learn of an oversight by June which turned out to be a costly mistake.

Heng was told that since the policy owner had passed away, the nominee in the policy will be the trustee. However, for that to happen, the nominee must be at least 18 years old and not incapacitated mentally.

Read: The Amazing Reconciliation Of Father And Son, And This Reflected Inside The Will

Who Protects Your Insurance Money, When The Nominee Is Not Yet 18?

Then comes the hard question of who protects your insurance money? Since Tim is not 18, the trustee will be his surviving parent, which is in this case is his father, who left both mother and child some time ago.

Heng knows that once the money reaches his hands, Tim would never see it again. If she had known, June would have appointed a new trustee – an individual or a trust company who can hold this insurance money for Tim until he grows up.

This is reaffirmed by the new Financial Services Act (FSA) which repealed the Insurance Act and made it invalid for the policy owner to be trustee of the insurance policy. Those who named themselves as trustee even prior to the FSA coming into force would have to change trustees for complete protection of the money.

As this is a common situation, the best solution for a single parent to protect their insurance monies from ending up with an unintended person or used for unintended purpose would be through the setting up of a Single Parent Trust.

In June’s situation, she can easily set up this trust by assigning the life insurance policy to the licensed trust company. This will enable the trustee to claim the insurance proceeds upon her death or disability.

Read: Special Needs Trust: I’m Nobody’s Child

Setting Up A Trust Deed

She could provide instructions to the trustee through a trust deed, for example; to cover her medical expenses if she is critically ill, for scheduled payments for Tim’s living expenses and education, thus ensuring that his needs will be provided for as she would have wished for him.

In this manner, she is also rest assured that another problem is averted – an inheritance being squandered away in the hands of a young heir who is inexperienced in handling a large sum of money so early in life.

A trust is indeed a viable approach to ensure total protection of insurance monies to be utilized according to one’s wishes. It is also an advantage to have a trust company as trustee instead of an individual as the trust company is impartial and is duty bound to follow the terms and conditions in the trust deed whereas an individual may not be so compliant with regard to other people’s money.

The perpetuity of a trust company is also another advantage as a natural person is liable to die, fall ill, meet with an accident and be in capacitated, become of unsound mind or go bankrupt. At least you will have a peace of mind, knowing that there’s an organisation who protects your insurance money.

Read: Bob’s Dilemma: How To Convert Highly Illiquid Assets To More Liquid And Easily Realisable

About Rockwills International Group

Rockwills International Group, now in its 28th year, pioneered professional will writing in 1995 and has since evolved into the leading estate planning specialist in the country. It is today the largest provider of solutions and support services in the areas of trusts, succession, management and distribution of wealth. It has done over 300,000 wills and 16,000 trusts and holds more than RM25 billion in assets under trust.

Previous Post

Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 2

Next Post

ASUS Announces All-New Vivobook Go 15 (E1504F), Your Compact & Super-Durable Companion

Next Post

ASUS Announces All-New Vivobook Go 15 (E1504F), Your Compact & Super-Durable Companion

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Morningstar Awards 2024 Morningstar Awards 2024 Morningstar Awards 2024
  • Trending
  • Comments
  • Latest

Robo Advisor In Malaysia, 8 Robo Advisor Platforms To Choose From

17/08/2022

MRTT VS MRTA, What’s The Difference?

11/10/2023
A calculator on financial chart, financial concept

Tax For The 6 Common Investments In Malaysia

19/09/2023

How To Open A CDS And Share Trading Account?

02/05/2023

Digital Fundraising Platforms in Malaysia

Retirement Plans for the Self-Employed

SC Guidelines On Digital Assets

Retirement planning advise from the experts

Retirement Planning: Best Practices and Advice From Experts

CGTN: Peng Liyuan and Brazil’s first lady visit NCPA in Beijing, vow to deepen cultural exchange

14/05/2025

數碼港舉辦「人工智能 x 網絡安全論壇」

14/05/2025

Cyberport Hosts “AI x Cybersecurity Forum”

14/05/2025

ฝึกฝนกับทุกลมหายใจ: นวัตกรรมการบำบัดด้วยการหายใจเพื่อสุขภาพหัวใจ สมอง และการชะลอวัย

14/05/2025

CGTN: Peng Liyuan and Brazil’s first lady visit NCPA in Beijing, vow to deepen cultural exchange

22 hours ago

數碼港舉辦「人工智能 x 網絡安全論壇」

1 day ago

Cyberport Hosts “AI x Cybersecurity Forum”

1 day ago

ฝึกฝนกับทุกลมหายใจ: นวัตกรรมการบำบัดด้วยการหายใจเพื่อสุขภาพหัวใจ สมอง และการชะลอวัย

1 day ago
The Smart Investor

© 2024 The SmartInvestor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

Category

  • About
  • Subscribe
  • Write For Us
  • Payment Policy
  • Shipping Policy
  • Privacy Policy
  • Contact Us

Sign up to read our newsletter

  • About
  • Contact Us
  • Home
  • Home (Bahasa Malayu)
  • Newsletter
  • Payment Policy
  • Privacy Policy
  • Shipping Policy
  • Subscribe
  • Write For Us

© 2024 The SmartInvestor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

No Result
View All Result
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
      • Islamic Personal Finance
    • Alternative Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Feature
    • Regional / Global
  • ESG
  • News & Events
  • What’s News Asia

© 2024 The SmartInvestor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.