Planning for Vulnerable Beneficiaries – Consider “3G Insurance Plans” as an alternative Legacy Asset
A ”3G Insurance Plan” is a type of insurance plan designed to provide wealth for 3 generations. Such plans help to provide a stream of income for the owner of the plan and subsequently for his beneficiary. The capital is usually preserved and passed down to the 3rdGeneration. This may be one of the more cost effective methods adopted by Parents, Benefactors, Guardians or Caregivers who wish to benefit their dependent or ward for a lifetime.
How does a “3G Insurance Plan” work?
> Mr Ang aged 40 plans to set aside $300,000 cash for his daughter aged 8 and his future grand children as part of his legacy planning.
> Mr Ang takes up an Insurance Plan with his daughter as the Life Insured and this plan starts to pay an income stream from the end of the 5th year from the commencement of the plan. He can choose to re-deposit the income back into the plan or to spend it on himself.
> Mr Ang then decides to transfer the ownership of the plan to his daughter when she turns 35 years old. This will allow her to continue receiving the income stream provided by the plan.
His daughter not only inherits the plan which provides her with an income stream, it also provides a coverage amount of $300,000 (the original capital) plus additional bonuses. Upon her demise, the coverage amount will be paid to her beneficiaries.
Keeping It Simple for Everyone.
“3G Insurance plans” are not usually recommended as the only type of legacy assets but often, they have very good reasons to be part of a well thought out legacy plan. This is because of its ability to convert the legacy asset into the following real life effects for both you and your beneficiary.
1. Money in the form of Income
By giving the money in the form of an Insurance plan, the effect is that the beneficiary will be receiving a stream of income for life instead of a large sum of money immediately. To a vulnerable beneficiary, a large sum of money is a big inheritance while a lifetime of monthly income is an invaluable legacy.
2. Regular Income without Regular Management
This is perhaps the most unique feature and benefit of an Insurance plan. It provides a stream of income, typically for a lifetime, for the beneficiary. As the insurance company is managing the regularity of the income pay out, the beneficiary does not have to be actively or competently involved. For a vulnerable beneficiary, this is usually the most important consideration – a fuss free approach.
3. Continue your Legacy
“3G Insurance plan” comes with death benefit which is generally equivalent to the initial amount of premium invested. This means that not only will the beneficiary be able to benefit in the form of lifetime income, the initial sum of premium will be preserved to the generation after in the form of a low risk guaranteed life insurance pay out.