Quora Answer: Does a Living Trust Keep a Family’s Private Financial Business Out of the Public Record?

The following is my answer to a Quora question: “Does a living trust actually keep a family’s private financial business out of the public record?”

A will is not a private document once its owner dies.  It becomes an exhibit.  Applying for a Grant of Probate in Singapore requires filing the will with the Family Justice Courts, and any contested application proceeds as open litigation, with the underlying facts becoming part of the public judicial record.  Singapore’s own case law shows exactly how far that exposure extends.  In AAG v Estate of AAH, deceased, decided by the High Court in 2009 and upheld on appeal, a man died intestate in February 2008, survived by a lawful wife and four legitimate daughters.  He had also fathered two illegitimate daughters, born in 1999 and 2001, with a mistress, his paternity undisputed and his name recorded on both girls’ birth certificates.  The mistress applied to court seeking maintenance for the two children from his estate.  The result is now permanently published case law, citable by any lawyer, readable by anyone with an internet connection, laying out in full the existence of the mistress, the two children, and the family’s private arrangements the wife may never have known about until the litigation itself forced it into the open.  A living trust does not carry this exposure, because it is never filed with a probate registry in the first place.

A living trust, settled during the settlor’s lifetime, transfers legal ownership of assets to a trustee immediately, subject to the terms of the trust deed.  When the settlor dies, there is no estate to administer for those assets, because they were never his to begin with in the eyes of the law.  No Grant of Probate is required for trust assets, no court filing occurs, and the trust deed itself has no statutory obligation to be lodged anywhere public.  Singapore reinforces this through the Trust Companies Act framework and, critically, through the absence of forced heirship rules, meaning a settlor can allocate assets however he genuinely wishes without a mandatory statutory share reserved for specific relatives.  Combine that with Singapore’s abolition of estate duty in 2008, and the incentive structure becomes obvious: privacy, control, and zero estate tax exposure, achieved by simply never entering the public system a contested estate is forced into.

Life Insurance is the Instrument That Closes the Remaining Gap

A trust solves privacy.  It does not, on its own, solve speed, because even a well-administered trust can face delay if underlying assets require valuation or liquidation.  Life insurance, nominated correctly, closes that gap.  Under Section 49L of the Insurance Act 1966, a policy owner may make an irrevocable trust nomination in favour of a spouse and children.  Section 49M permits a broader, revocable nomination to any named individual or organisation.  A Section 49L nomination is genuinely powerful: the moment it is made, the policy owner surrenders all further rights over the policy, the proceeds legally belong to the named beneficiaries immediately, a subsequent will cannot override it, and marriage or divorce does not automatically revoke it.  Crucially, proceeds under a valid nomination bypass the Grant of Probate entirely, and insurers typically settle claims within weeks rather than the months a full probate application requires.  The proceeds also generally sit outside the policy owner’s estate, meaning creditors of the deceased usually cannot claim against them.  A life insurance policy held inside a trust, with the trustee as formal owner or nominee, therefore delivers what property and business equity alone cannot: immediate, private liquidity, released without a single document ever entering a public court file.

Singapore hosts over 2,000 tax-incentivised Single Family Offices as of the most recent reporting period, up from roughly 400 in 2020, managing a meaningful share of the S$5.41 trillion in total assets under management now sitting within Singapore’s asset management industry.  A significant portion of that capital sits inside this structure: a private trust company acting as trustee, holding direct investments alongside life insurance policies nominated under Section 49L, distributed entirely according to instructions the settlor set while alive, and never once requiring a public court filing to execute.  This is not an exotic technique reserved for billionaires with private bankers on speed dial.  It is a documented, statutorily supported mechanism, available to anyone willing to structure their estate before death rather than leaving that structuring to a probate court and whichever relatives, or mistresses, decide to contest the outcome afterwards.

A living trust does exactly what the question asks, and the reason is structural rather than aspirational.  It removes the asset from the probate system entirely, and Singapore’s Insurance Act gives life insurance the same privilege through a different mechanism.  Families do not usually fracture over the size of an inheritance.  They fracture over the public, often humiliating manner of its disclosure, the moment a contested estate drags every private arrangement into a courtroom and, eventually, into a published judgment for anyone to read.  A trust, properly funded with a life insurance policy nominated in advance, removes that moment before it can ever occur.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

Quora Answer: How Can You Use Trusts to Ensure Your Inheritance Wishes are Respected While Keeping Details Hidden from Nosy Relatives?

The following is my answer to a Quora question: “How can you use trusts to ensure your inheritance wishes are respected while keeping details hidden from nosy relatives?”

A will, once it enters the probate process, is no longer a private document.  The Family Justice Courts publish hearing lists, and any contested probate matter proceeds as open litigation, with the underlying facts of the dispute becoming part of the public record.  Singapore’s own case law demonstrates exactly how ugly this gets.  In 2010, the Court of Appeal invalidated the will of a Mdm. Goh, a woman who had amassed substantial wealth through property investment, after finding she had lacked testamentary capacity when she signed it in 1996.  The court noted the circumstances surrounding the will’s execution were suspicious, and specifically flagged that Mdm. Goh’s favourite child had been inexplicably excluded from it.  Every detail of that family’s private grievances, the favouritism, the capacity dispute, the suspicious drafting circumstances, became a matter of published judicial record, cited in law firm articles and legal textbooks ever since.  A will contested in court does not stay a family matter.  It becomes case law.

A properly constituted trust does not go through probate at all.  Assets settled into a trust during the settlor’s lifetime pass to beneficiaries according to the trust deed, administered privately by the trustee, with no requirement to file the deed’s contents with any court or public registry.  Singapore reinforces this privacy further through its Trust Companies Act framework and the absence of forced heirship rules, meaning a settlor retains genuine freedom to allocate assets however he chooses, unlike jurisdictions where a fixed statutory share must go to specific relatives regardless of the settlor’s actual wishes.  Combine that with Singapore’s abolition of estate duty in 2008, and a trust here achieves three things simultaneously: control over distribution, privacy from both nosy relatives and the general public, and zero estate tax exposure on the assets themselves.

Why Life Insurance is the Instrument That Makes This Fast, Not Just Private

Trusts solve privacy.  They do not, on their own, solve speed, since even a well-drafted trust can face administrative delay if the underlying assets require valuation, liquidation, or cross-border transfer.  Life insurance, nominated correctly, solves the speed problem directly.  Under Section 49L of the Insurance Act 1966, a policy owner may make an irrevocable trust nomination in favour of a spouse and children, and Section 49M permits a broader, though revocable, nomination to any named person or organisation.  A Section 49L nomination is genuinely powerful: the moment it is made, the policy owner surrenders all further rights over the policy, the proceeds legally belong to the beneficiaries immediately, a will cannot override it, and neither marriage nor divorce automatically revokes it.  Critically, proceeds under a valid nomination bypass the Grant of Probate entirely.  Insurers typically process payment within weeks of receiving notification of death, rather than the months a full probate application routinely takes.  The proceeds also sit outside the policy owner’s estate, meaning creditors of the deceased generally cannot claim against them, a genuinely useful feature for anyone carrying business guarantees or personal debt exposure.

How Singapore’s HNWI Combine the Two

The wealthy do not choose between a trust and an insurance policy.  They stack them.  A common structure places a life insurance policy inside an irrevocable trust, with the trustee, rather than the individual beneficiaries, as the formal policy owner or nominee.  This delivers immediate liquidity on death, precisely engineered to solve Singapore’s well-documented asset-rich, cash-poor problem, where a family holding substantial property, business equity, or investment portfolios can find every one of those assets frozen pending estate administration at exactly the moment funeral costs, business continuity payments, and family living expenses are due.  The insurance payout, ring-fenced inside the trust and released without waiting for probate, closes that cash-flow gap without forcing a fire sale of the family business or a distressed property disposal.

Layer this onto Singapore’s broader private wealth infrastructure, and the picture becomes clearer.  Singapore now hosts over 2,000 tax-incentivised Single Family Offices, up from roughly 400 in 2020, and total assets under management across the industry reached S$5.41 trillion in the most recent reporting year.  A meaningful share of that capital sits inside exactly this structure: a private trust company acting as trustee, holding both direct investments and life insurance policies nominated under Section 49L, administered without a single document ever entering a public court file, and distributed according to instructions the settlor controls entirely while alive and cannot be publicly litigated once he is gone.

Why This Matters More Than the Tax Savings

Families do not usually fracture over the size of an inheritance.  They fracture over the manner of its disclosure, the moment a will gets read aloud and a favourite child, an estranged sibling, or a second family becomes public knowledge to everyone in the room simultaneously.  A trust, properly funded with a life insurance policy nominated in advance, removes that moment entirely.  There is no dramatic reading.  There is no court file for a curious relative to search.  There is simply a trustee, quietly executing instructions the settlor set years earlier, while every detail the family never needed to know about stays exactly where it belongs: private, and irrelevant to anyone it was never meant for.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code

Quora Answer: Can a Stepmother be a Beneficiary of a Life Insurance Policy?

The following is my answer to a Quora question: “Can a stepmother be a beneficiary of a life insurance policy?” 

When incepting a policy, a person can only take out a policy on a person where there is insurable interest.  In this case, that insurable interest has to be the spouse, parents, children, and key staff.  A stepmother is not in that equation.  However, a policy owner may nominate the beneficiaries.  The stepmother or anyone else can be nominated as a beneficiary by the owner of the policy.

Quora Answer: Should You Name Your Trust as a Beneficiary of Your Life Insurance?

The following is my answer to a Quora question: “Should you name your trust as a beneficiary of your life insurance?” 

You do such a thing when you do not intend your policy to pay out in lump sum to your beneficiaries, or to your estates, if you have not nominated any beneficiaries.  People name their trust the beneficiaries of their life insurance when they intend for the trust to pay out over an extended period of time, perhaps across multiple beneficiaries.  This would be the only reason why you would want your insurance policy to pay out to your trust.

Quora Answer: Does Life Insurance Go to Next-of-Kin?

The following is my answer to a Quora question: “Does life insurance go to the next of kin?” 

Unless the insurance policy is nominated to the preferred beneficiary, the policy is paid out to the estate of the deceased life insured.  There, it undergoes the probate process, and is paid out according to the will, or failing which, the guidelines of the public trustee office.  To avoid probate and ensure that the preferred beneficiaries benefit the most from the claim, it is always prudent to nominate the beneficiaries for the policy.  This means that once a claim is approved, the monies reach them in a matter of days.

Quora Answer: How Long Does It Take to Set Up a Blind Trust?

The following is my answer to a Quora question: “How long does it take to set up a blind trust?” 

The process of setting up a trust, revocable, irrevocable, blind or otherwise, is a relatively simple process.  If you know what you are doing, have a clear idea what you want in the letter of wishes, you have the details and agreement of the trustees, and beneficiaries, and have a lawyer on hand, it takes a few minutes.  A lot of time is spent working on the letter of wishes. 

Trusts take time to set up when the would be settlor is still deciding on who to be the trustee, is unclear of legal requirements, and has trouble getting the required information, such as the trustee details.  The set up itself is merely keying in details into the system and ratifying that letter of wishes. 

Now, the process of transferring assets to a trust on the other hand, especially a blind trust, which is an irrevocable trust, may take a few weeks, depending on the nature of the asset, and where it is.  Signing over cash and bank accounts is straightforward.  Transferring property requires changes to the deed, which involves the authorities.  Transferring ownership of assets based overseas, may require more time to verify a lot of documents across jurisdictions.  Done efficiently, this may take a two or three months.

Quora Answer: Is Life Insurance Part of an Estate Regardless of the Estate’s Debt?

The following is my answer to a Quora question: “Is life insurance considered part of an estate, subject to paying off debt, or is it solely for the beneficiary, regardless of the estate’s debt?” 

If a life insurance policy is not nominated to a beneficiary, then it is part of the estate of the deceased, and subject to the probate process.  This means the payout is consolidated with the rest of the estate, less debts and obligations, and the remainder disbursed to the heirs according to the will, or of there is no will, as per the direction of the public trustee in as equitable a manner as stipulated by law. 

If the life insurance policy is nominated to a beneficiary or beneficiaries, then is not part of the probate process, and is distributed according to the policy nomination to the beneficiary or beneficiaries.  The possible exception to the rule is if the deceased is a bankrupt, in which case the public trustee determines how much of it goes to creditors.

Quora Answer: What Type of Inheritance Distribution Causes the Least Conflict among Heirs?

The following is my answer to a Quora question: “What type of inheritance distribution contract causes the least fighting among the children of the deceased?”

There are no guarantees that the heirs will not fight.  People have their own perspectives and entitlements.  What you should be concerned about is that the disbursement of the estate is unchallenged and according to your wishes.  In that vein, you can choose to use a will or if the estate is substantial enough, you could choose to set up a trust. 

A will is part of the probate process.  Wills should be prepared in advance, leave no ambiguity, and eliminate any uncertainty as to the mental state of the person preparing it.  It should be witnessed by someone, preferably an attorney, and it should be filed with a registrar of wills.  Wills should also be updated regularly to reflect developments in the estate, such as the acquisition of new property. 

Alternatively, if you have an estate large enough to be disbursed across several generations, or if you do not want your heirs to get all of the inheritance in one lump sum and waste it, you set up a trust.  A trust bypasses the probate process since it functions according to the letter of wishes created by the settlor, you, and managed by the trustees.

Quora Answer: Do You Need an Estate Planner to Set Up a Trust?

The following is my answer to a Quora question: “Do you need an estate planner to set up a trust?” 

Setting up a trust is no small thing.  You definitely need an estate planner to set it up for you, and draft the letter of wishes.  You need to consider whether you want a revocable or non-revocable trust, or whether there are specific needs, which may necessitate a blind trust, or a special needs trust.  You need to consider who you want as trustees, whether natural persons or even a law firm or bank.  There may be a requirement for a custodian bank.  There may be a requirement for an investment committee.  There are issues of compliance, insurance, and taxation to consider.  Unless you are in the industry, you are unlikely to have that knowledge.

Quora Answer: Do Financial Planners Play a Role in Helping Clients Prepare Wills?

The following is my answer to a Quora question: “Do financial planners play a role in helping clients prepare wills?” 

The financial consultant does not prepare the will per se.  He advises the client on estate planning, and that goes beyond the will.  This depends on the assets and their ownership structure, since some assets are owned directly, and some are owner through vehicles such as companies and trusts. 

Insurance policies can be nominated.  This bypasses the probate process, and the proceeds go directly to the beneficiaries.  Assets that are jointly owned, such as the bank account and property would revert to the surviving owner.  An exception is when there is a successful creditor claim.  Assets in companies become part of the estate, and are covered under the will.  Assets in testamentary trusts are subject to the terms of the trust document, and distributed to the beneficiaries accordingly, or as amended by the trustees, within their discretionary powers detailed in that trust document.  All other assets are part of the estate. 

The role of the financial consultant is to work with the lawyer, the relationship manager, and perhaps, the tax consultant, to identify gaps in the estate, and what the client wishes to leave to specific beneficiaries, and propose insurance policies or other means to address them.  Depending on where the assets are in the world, there are considerations such as local taxes, currency exposure, political exposure and other forms of risk to be mitigated.

Quora Answer: Is It a Smart Move to Have Multiple Life Insurance Policies for Myself for the Family?

The following is my answer to a Quora question: “Is it a smart move to have multiple life insurance policies for myself for the family?” 

This depends on a few factors.  Firstly, what sort of life coverage do you have?  Only death benefit?  Does it have terminal illness, critical illness, early payor benefit, disability?  Does the death benefit have special provisions for accidental death?  What about self-harm and suicide?  Is the coverage limited by region, or is it international?  Are there exceptions for certain occupations or activities?  If you have any or all of these, do you actually need it? 

Secondly, there are limits to how much coverage you can take on your life.  In Singapore, insurers generally accept a maximum of $6 million for death benefit, and $3 million for disability, although this may vary.  You could ask for that limit to be raised, but that would require special underwriting, and you have to prove you are worth that much.  This means, if you were to decline disclosing prior coverage, and actually have more than the limit, you can only claim up to that limit.  Or the insurer may decline to payout for non-disclosure, and return your premiums less costs to the estate. 

In general, when you get coverage, you should undergo a financial health review process, and obtain coverage that is suitable.  If budget is not a constraint, you want enough that your family has enough to maintain their standard of living upon your death, until they are able to adjust to that loss of income, if you are the primary provider.  Death is an event.  If the coverage is for critical illness, you are likely to survive for years.  There is a likely loss of more than one income in the family, because your spouse or others have to put aside time to care for you, and that is even with the cost of getting help such as a home-based nurse or maid.  If it is disability, you have that, and you could live two decades in that state.  The coverage you need in such a case is likely up to ten times the income you need to protect. 

In such a case, it would be prudent to break it up across a few policies.  Whole life policies have a value, and may function as financial instruments.  In the event that you have problems with your income, you have options such as dropping a policy, taking a premium loan for one or two of them, or halting coverage for a period of time without dropping the policy.  More policies mean more options.

Quora Answer: Can I Set Up My Own Revocable Trust?

The following is my answer to a Quora question: “Can I set up my own revocable trust?” 

If you have enough funds or assets, and are concerned about the distribution of your estate, it is worth your while to consider setting up a revocable trust.  A revocable trust is not a distinct legal entity, and does not protect you from creditors, or legal action against your assets, since they are still vested with you.  The purpose of a revocable trust is to avoid probate when you pass away, since it becomes a testamentary trust upon your demise.  A testamentary trust is an irrevocable trust. 

Setting up a revocable trust is easy.  You could get a corporate secretary, or a lawyer to set one up, and there is a standard trust document.  This document may be amended as and when required, to better reflect your needs and requirements.  Since the trust is revocable, you have full control over your assets, and may dispose of them as you wish. 

Because this is a trust, it is a distinct legal entity when it comes to the disbursement of your estate.  The advantage is that you may spread the disbursement over a period of time, even across generations.  You may stipulate that the trustees invest the assets, and give some of the proceeds to specific beneficiaries.  You have a means to ensure that your beneficiaries do not dissipate their inheritance because they do not know how to manage a windfall.  If these are your concerns, and you have substantial assets in your estate, then this is the option for you.

Quora Answer: Why Should People Not Ignore Estate Planning?

The following is my answer to a Quora question: “Why should people not ignore estate planning?”

Estate planning is about securing the assets of the deceased, according to his wishes, for the benefit of the next generation, or other designated beneficiaries.  Estate planning increases exponentially in importance the larger the estate. 

The first consideration of estate planning is about tax exposure.  The estate may be distributed across several different tax jurisdictions, and may need to be reorganised.  The assets in the asset may need to be restructured with trust structures or companies to reduce that tax exposure.  Many parts of the world have an estate tax.  There are ways of mitigating that tax bill. 

The second consideration is to protect the interests of your designated beneficiaries.  This is not simply about willing assets to them, but also about ensuring they receive it in a manner that they can actually benefit from the asset.  This pertains to issues such as accessibility, legacy costs, and so forth.  There should also be provisions for beneficiaries are below the age of majority, or not in a position to represent themselves, such as beneficiaries of unsound mind or intellectually diminished. 

The third consideration is to prevent litigation and infighting among claimants.  This would destroy the family, and the lawyers and the government would come in and get much of it.  This also includes consideration for property in joint tenancy, shares which are pledged, and insurance policies which should be nominated.

Quora Answer: What are the Reasons People Do Not Take Out Insurance?

The following is my answer to a Quora question: “What are the reasons people do not take out insurance?” 

Insurance is part of risk management.  It has a role in estate planning, in risk mitigation for specific activities, and in covering unplanned expenses.  People who do not take up insurance do so for three main reasons. 

The first is that they do not understand the role of the different types of insurance coverage, and minimise its importance.  They do not prioritise it, since it is viewed as an expenditure.  If they do take it up, it is the first item to be dropped in the event of a cashflow challenge. 

The second is that they are sceptical about the role of insurance, or shun it for ideological or religious reasons.  Perhaps they believe that it is against religion, such as some Muslims with their quaint notions of what is shari’ah compliant.  Perhaps they had a bad claim experience, and imagine that this is all a scam. 

The third is because insurance is not a viable option for them.  This could be denial of hospitalisation coverage due to pre-existing condition, or denial of general insurance coverage due to a poor claim history, or they could be somewhere insurance is not well regulated, and the industry has a poor reputation.  This is most likely in developing nations, fraud by insurers or their representatives is not uncommon.

Quora Answer: Can Funds be Withdrawn from an Irrevocable Trust?

The following is my answer to a Quora question: “Can funds be withdrawn from an irrevocable trust?” 

An irrevocable trust is set up as a distinct legal entity from the settlor of the trust.  It is a type of trust where the terms of the trust document cannot be modified, be amended, or be terminated, without the permission of the beneficiaries.  Since the settlor effectively transferred all ownership of assets into the trust, he legally removed all rights of ownership to the assets, and to the trust. 

That being said, there are provisions within the trust document which can be added upon setting up the trust which allow a settlor to take control of some assets.  It cannot be done directly, since that would render the irrevocability of the trust null and void.  It can be arranged through a process of decanting, where there is provisions within the trust which allow specific assets or asset classes to be moved to a newer trust, one where the settlor is a trustee.  It could also allow for the trust to be folded into another trust.  All of this is ostensibly for the purpose of more effectively managing the assets in a trust.  Provisions could also be added to change the domicile of the trust across borders, if that is more advantageous. 

Another way of ensuring some control is to make a company one of the beneficiaries, or the only beneficiary, and have a beneficial relationship with that company.  This would involve arranging to be a trustee, or to have control of a trustee, and then being a controlling party in the beneficiary. 

Irrevocable trusts are “irrevocable” in the sense that assets vested in the trust have their ownership “irrevocably” transferred to the trust.  This “irrevocability” is a façade which can be arranged.  There are always ways around legalities.

The Wealthy Need to Protect Their Assets Better

One of the more unusual things about HNW in Asia, is that unlike equivalent wealthy families in Europe and the US, they tend to hold assets directly, or personally controlled family businesses.  Previously, there was little need for this in place such as Singapore and Hong Kong, where estate and capital gains taxes were either minimal or non-existent.  The wealthy tended to invest close to home, and stick to the family business and immediate ecosystem. 

In recent years, due to sovereign borrowing to tide through the economic contraction of the pandemic, due to the increased gap between the socioeconomic classes, and consumer activism, among many other factors, there is increased pressure on a wealth tax, and increased taxes on the wealthy.  This is not unjustified in places like the US.  A wealth tax is not the way Singapore should go. 

In such a climate, it becomes necessary to utilise trust structures, investment funds, VCC set-ups, and other, more sophisticated structures and vehicles to mitigate tax exposure across multiple jurisdictions, silo off risk, and manage varying asset classes.  People are learning that insurance policies are themselves distinct financial instruments, and not just for mitigating risk exposure.  SFOs in Singapore are expected to not only increase in number, but in sophistication as well.  That is our business opportunity for Equinox GEMTZ.

Risk Mitigation in Wealth Management

Wealth management strategies are incomplete without risk management.  This is why insurance is an integral part of it, and its importance increases the more assets there are.  The more someone has, the more they have to lose.  Risk management is either overlooked, or outright disregarded, by many except the absolute wealthiest.  When risk is nit managed, a variety of events can derail any wealth management strategy, from illness, to estate disputes, to litigation.  Unless we are considering the mot unlikeliest of scenarios – an alien invasion, for example – or a risk that is beyond out ability to manage  -a meteor dropping into the ocean precipitating an extinction level event – all risk can be managed, and their effects mitigated. 

We need a paradigm shift, and understand that proper risk management ensures that loss of property, life, health, or income, is not debilitating.  We buy insurance not because we will die, but because the people we love are going to live.  A proper risk management strategy means that our interests can recover from loss.  Risk management, for the average person, covers several areas. 

The foundation of any insurance portfolio is life insurance itself.  Life insurance is not just insurance against loss of life, but also loss of quality of life and earning capacity, anything leading to a diminished standard of living.  This includes disability and critical illness.  Death itself is an event, and the survivors deal with that one time loss.  Disability and critical illness, on the other hand, are a lot more expensive.  They are not just a cost, but could result in the loss of more than one source of income for the family, since someone would have to take care of you.  That loss of income in totality is what needs to be covered. 

In addition to loss of direct income, life insurance is required to cover the costs of income replacement, from outstanding debt, to settlement of estate and probate, to fees arising from any of these.  Depending on where in the world the beneficiaries are, relative to the assets, and the policy, there is the consideration of income tax and estate tax.  In Singapore, like many other places, there is no income tax on the proceeds of an insurance settlement.  These funds are treated as an unexpected gain.  Singapore is also one of the few places in the world which does not have an estate or inheritance tax. 

The gains of the policy can be structured as a one off payment direct to the individual, or through an irrevocable trust.  If the payout is very large, the latter may be more suitable, since it can be stretched over a period of time, or more than one generation.  This provides enhanced value to the payout, since it mitigates the risk that the beneficiaries would waste that money on immediate gain, and impoverish themselves, negating the reason for having a policy.  We must account for the possible lack of financial education in our beneficiaries. 

The same considerations apply to disability.  Just like critical illness, total and permanent disability affects the entire family unit, and leads to the loss of more than one income.  There is also the cost of renovating the home for access, as well as the cost for professional caregivers.  An accident plan mitigates some of the cost of disability due to accidents, but it is not enough.  When calculating disability, just like critical illness, we must factor the loss of one or more income streams over an extended period, perhaps twenty or thirty years. 

The other leg of a proper insurance portfolio is a good hospitalisation plan.  Hospitalisation plans are not just about settling hospital bills, but mitigating the cost of medical inflation.  They are a means to ensure the cost and availability of long-term care is reasonable.  In Singapore, the average life expectancy is well into the age of 85 and above.  With the best in modern medicine available in Singapore, it means that the average Singaporean will likely live to suffer some form of critical illness, requiring long-term care.  This also means they have a real chance of outliving their retirement funds and assets.  Since a significant portion of that premium is paid by Medisave, it makes sense that a Shield plan is a must. 

From life insurance, we need to consider the various forms of general insurance.  The first of these is homeowner’s insurance and property insurance.  Property insurance covers loss or damage of the property itself.  Homeowner’s insurance covers loss of items such as clothing, personal belongings, and expensive furniture within the property itself.  There is no point in insurance to replace the house after fire, if there is no money to furnish it, for example.  Finally, we need to consider other forms of liability, such as being a business owner, personal liability to litigation, and any other form of umbrella coverage that may be required. 

A policy portfolio needs to be reviewed annually, and updated regularly.  In specific cases, it needs to be nominated, or assigned to various trusts or companies, as needed.  When we consider coverage, we need to look at what we are prepared to lose in any untoward event, put a monetary cost to that loss, and consider what can be covered, at a reasonable budget.  A good insurance portfolio is a requirement for any prudent individual who is working at acquiring wealth, and intend to leave a legacy after his passing.