Estate Planning

Legacy Planning in Singapore: When is the right time to plan for your family?

byElena Owyong
  • Jan 24, 2018
  • 2 mins
  • 17.1K views

There's no way to know what events or illnesses might come your way and it's important to protect your family against them.
 
The Ministry of Health estimates that a staggering “1 in 2 Singaporeans who are healthy at the age of 65 is at risk of having a long-term disability over their lifetime.” This is a worrying situation. What happens to your family when you are unable to earn a living or when you are gone?
 
The answer to that question is legacy planning.
 
To put it simply, legacy planning is distributing your hard-earned money according to your wishes. This involves identifying, preserving and distributing your wealth in a thoughtful manner. 

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Legacy planning ensures that your wealth and hard-earned money is preserved to support your family and future generations. This is especially important when your children are young and you want to ensure that they have the best education to meet their aspirations.
 
In essence, legacy planning involves thinking of how to preserve your money for your family.
 
With proper legacy planning, you can better secure and pass your wealth to your loved ones in an unfortunate event.

Income’s TermLife Solitaire can make your legacy planning easier by providing a financial safety net should the unexpected happen with your preserved wealth. It is a term life insurance plan that provides coverage^ for death or terminal illness during the policy term to protect your legacy for your loved ones. You can choose to enhance your coverage with the total permanent disability (TPD) and dread diseases (DD) protection by attaching different riders with additional premiums.
 
^ If the insured becomes terminally ill or dies during the term of the policy, TermLife Solitaire will pay the sum assured. The policy will end when payment is made.
 
To illustrate how life insurance works, let’s look at the case of Mr John Tan, a 40-year-old engineer and his wife Ann, 40, who is a homemaker.
 
At 70 years old, Mr Tan dies of liver cancer and leaves the following assets and liabilities for Mrs Tan.

Assets Amount Remarks
Bank savings + Central Provident Fund (CPF)  $150,000 Mr Tan has nominated his wife to receive his CPF savings.
Investment  $80,000  
Total  $230,000  
Liability Amount Remarks
Housing loan for condominium unit (excluding interest)  $250,000 The loan has to be paid off in 5 years’ time.

While Mrs Tan has $150,000 in cash at her disposal, she is stretching it thin for multiple purposes – her living and medical expenses, paying off the housing loan and Mr Tan’s funeral expenses, just to name a few. As the cost of living continues to rise, these expenses will increase accordingly.
 
While Mrs Tan can liquidate her husband’s investments, she may make a loss if the market is doing poorly.
 
If Mr and Mrs Tan bought TermLife Solitaire on each other’s life, the situation will be different.
 
As indicated in the infographic, Mrs Tan can use the payout to defray her living expenses and pay off the debt concurrently.

TermLife Solitaire Protects Your Legacy

Since Mrs Tan can use the lump sum payout and existing savings to pay for her expenses, she can continue accumulating wealth from Mr Tan’s investments.

To find out how you can benefit from TermLife Solitaire or how life insurance works, refer to the details here or speak to one of our financial advisors today. You can also learn more about protecting and planning your finances for your family.
 
So, what are you waiting for? Start planning for your legacy now, while you are young, healthy and have the resources. 

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