I have spoken to many people and many give me a common look when I asked them “Have you done your legacy planning? Have you write your will?” and the look is a confused look. “What is legacy planning? Why do I need to write a will? I am not rich, I don’t have many assets, no need to write will!”
There are many advantages to writing a will which many are not aware of. Having a will helps you to distribute your assets according to your wish. This is especially useful if you want a particular family member to have more for e.g. your aged grandparents for taking care of you when you are young, or your special needs family member if you have one. If you are contributing a sum of money to charities or to your religion regularly and you want to continue to do so after you pass on, you can also state in the will as well.
For those who have very young children, you can also appoint guardian for them too to take care of them till they become independent. It is better for you to appoint somebody you trust to be a guardian so that your children will be in good hands, else you would not have the assurance that your children are well taken care of when they grow up. No parents will want to see their children suffer.
If you have assets overseas such as properties, it would be good to include in the will as well so that it will be distributed accordingly. It would be very troublesome to engage a lawyer to do the paperwork only when your family realized that you have an overseas property which they failed to declare in the schedule of assets.
What happens if you do not have a will? Then your assets will be distributed accordingly to the Interstate Succession Act. Usually families will receive the estate’s money faster if the deceased has a will compared to those without a will. These money will come in useful to finance your family’s daily expenses especially if the deceased is a working adult financing the household expenses.
The cost of writing is cheap and you can engage a professional will writer to do it for you and usually the services they charge is lower than a lawyer. You do not need to engage a lawyer just to write a will.
Given that there is no disadvantage in writing a will, please talk to a will writer to know more about the process in writing a will and start to write one today and get the peace of mind you need!
Source: TODAY Online, 7 Feb 2015
The life insurance industry paid out to policyholders and beneficiaries has fell to S$6.79 billion in 2014 which is attributed to a drop in the paid out amount for matured policies. The rise in pay out for death, critical illness or disability claims however rose by 13% from 2013. On the whole, weighted new business remained the same as per last year while annual premium sales fell to 1.928 billion compared to 2013. The Life Insurance Association Singapore (LIA) said that the re-pricing exercise of Integrated Shield Plans (IPs) has seen a rise in premiums. In 2013, single premium sales increased to S$860.8 million and in 2014, the amount of new health insurance premiums fell by 42% to S$266 million from 2013. IPs and IP riders account for 92% of new health insurance premiums. LIA said that one in two individuals in Singapore has health cover, with premiums amounting to S$1.6 billion as of December in 2014. With the establishment of MediShield Life in end-2015, LIA would continue to collaborate with the Government and IP insurers to raise better public awareness and education on health insurance and on how MediShield Life and IP work.
What do all these figures mean to you? By looking at the increased in pay outs for death, critical illness or disability claims and the increase in new health insurance premiums, this shows that these areas are a concern of the people here. How about yourself? Are you covered too and is your coverage sufficient?
Universal Life Insurance Popular Among The Rich
Source: The Straits Times, 27 Jan 2015
The affluent in Singapore are increasingly looking at insurance to protect themselves against life’s uncertainties so as to increase the amount of legacy that they are going to leave behind. This is a regular life insurance policy that offers very huge payouts for their families upon their death. This policy will help clients to create large amount of wealth, say for example, a businessman has a total assets of $5 million and is expected to spend $1 million for his retirement. Therefore, he would leave behind $4 million after he passed on. If he decides to buy a universal life insurance with a premium that cost $1 million but with a $5 million sum assured, his total expenditure would be $2 million, and would leave behind $8 million upon his death.
The flexibility of such policies are gaining attention among the rich as the insured person can choose over their assured sum and the payment schedule, such as between regular premiums or a one-time premium payment. Clients can also take a loan from private bank and used their assets as collateral to pay for the premiums. However, universal life insurance is costly. For instance, the minimum premium for such policies is typically about US$1 million. One possible risk is that the returns from the policy are insufficient to cover the long term insurance costs and charges. Top-ups of the premium may be required or risk a lapse in the policy. There is foreign exchange risk too, as these policies are usually in US dollars. Universal life insurance will supplement the clients’ current stocks and bonds portfolio to diversify the risks, thus making it a viable and secured option.
Being the rich, do you think that this universal insurance policy beneficial to you or do you think other type of life insurance policies are equally good or even better option for you?