Saturday, January 12, 2013

How to Maximize Your Life Insurance Protection?

Most have bought one or more Life Insurance Policy but many still didn't maximize the benefits and protection out of it.


I believe many still don't know about Insurance Trust. Not all Insurance Agent know about it too.

What is an "Insurance Trust"?
Basically, A Life Insurance Policy/Policies and A Trust.

Advantage of having an Insurance Trust, than merely just having a Life Insurance policy with proper nomination:
- it avoids Probate, enable quick distribution of money.
- no legal process to go thru, because the policy (and the claim) belongs to the Trustee.
- you can specify how and when to use the insurance $$ for your children/loved one, to prevent misuse or being conned or any unforeseen circumstances.

Getting a Probate, with a valid Will, will still take times.

Further, having a Section 166 Nomination may have some limitation that you and/or your agent not aware of, including
- limited to only wife and child or parent
- can not specific substitute beneficiary
- can not specific condition to distribute
- can not have periodical distribution, lump sum only.

In case, the minor (child below 18 years old) is the S166 nominee, the surviving parent of minor (i.e. ex-spouse) can claim and spend the insurance sum.

So, after all, by merely having Nomination is definitely not good enough for many people.