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.