The local COVID-19 Pandemic is severe, and with the sudden death cases after vaccination, the bank industry noticed the inquiries for Insurance Trust have recently soared. Zhao, Zi-Ren, the Senior Manager of Trust Department of Cathay United Bank, pointed that Trust has the advantage of specific fund for specific purpose. This could effectively ensure assets be used to take care of future life of himself and his family, as well as preventing financial fraudulence under aging society and avoiding assets to be misused at his old age. Trusts can be considered to be the publics’ essential financial management tool in this high risk century.
In preventing insurance beneficiaries becoming dishonest persons’ target, the Financial Supervisory Commission of R.O.C. (the “FSC”) announced “Death, Total Disability and Maturity Insurance” Insurance Policy in 2015, and may collect claim through “payment by instalment”. To specify the usage purpose and manner of insurance, it must be done by the way of trust. Zhao gave an example that the public may state the beneficiaries to be assigned with a larger sum when studying abroad, starting up business or marriage. At the same time, they may set a supervisor in the trust, and when there are any unexpected situations or extra demands, the supervisor could assist the trusted bank to judge for the trust fund payment in ensuring to fulfill the trustee’s will and beneficiaries’ interests.
The FSC gave an example that, Ms. Wang at her age of 36 who was a single mum, raising a 7 year old child on her own, with financial managing concept and risk awareness. She held 20 year fixed life insurance, whole-life insurance, pension insurance and investment-linked insurance. Life insurance values at NTD10 million, she could combine all of her insurance policies into an insurance trust deed. The contract signing handling fee is NTD3,000 to NTD5,000. Before any risk events and insurance fund is yet to be generated into the trust account, no other expenses would be incurred. However, when the insurance fund is generated and entered into the trust account, there would be a trust management fee every year.
In the case where the insured - Ms. Wang was deceased, the insurance claim of NTD10 million would be released to the trust account. The trust administrator would manage and pay TWD 30,000 living expenses and education fund to the beneficiary on a monthly basis according to the trust deed. It may also remark in the deed that when the child has an urgent demand for a large amount of fund, e.g. medical expenses and study abroad expenses, etc., written application may be made upon the appointed trust supervisor’s approval. Instruction can also be made as to transfer the remaining trust assets to the beneficiary at his age of 20 when becoming an adult and terminating the trust relationship.
The largest insurance trust administrator in Taiwan is Cathay United Bank. Zhao has handled many cases and he realized recently that people care more about life and safety of assets under the pandemic. Although people have awareness in making use of insurance and having the estates to take care of the family, they often forget that not all people are good at managing assets. Under this high uncertainty era, early planning of insurance trust shall be the best arrangement in ensuring his/her financial goals can be achieved. Once the claim becomes effective, the trusted bank shall follow the trust deed’s promised timeline and terms to pay, which ensures that the estates will not run the risk of being misused.
News Source：【Economic Daily News 2020/07/17】
