Estate Planning

Legacy Planning with TermLife Solitaire: Ensuring Your Loved Ones are Protected

byJeff Cuellar
  • Mar 08, 2019
  • 9 mins
family lying down together happily

There’s no better feeling than seeing your hard work pay off — such as advancing your career with a well-deserved promotion or starting your own business. These accomplishments not only represent your dedication and effort but also form the foundation of the legacy you’ll leave behind. As you pave your path of success, it becomes crucial to think about how you can ensure that this legacy remains intact for future generations.

Legacy planning is a proactive financial approach that ensures – in the event of your passing or potential mental incapacity – your assets transition smoothly to your loved ones as you intended.

Without such planning, bear in mind the distribution of your assets will default to Singapore's Intestate Succession Act, or the Islamic inheritance law for Muslims. This could prolong the process and may result in asset distribution that doesn't reflect your preferences.

Legacy planning thus provides clear guidelines and directions for the management of the assets you leave behind. Besides streamlining the asset distribution process, legacy planning is vital for:

1. Control over asset distribution

At the heart of legacy planning is the ability to choose specific beneficiaries for various assets, from real estate holdings to stock portfolios. This ensures your hard-earned wealth is transferred precisely to those you've earmarked, preventing unintended beneficiaries from laying claim. Without a structured legacy plan, the distribution might not align with your intended wishes.

2. Efficient wealth transfer

Legacy planning isn't merely about who is nominated to receive the assets. Legacy planning services will ensure that beneficiaries derive the maximum value from their inheritance, safeguarded from excessive taxes. Recognising and optimally allocating assets, including those that are lesser-known or hidden, can lead to notable tax savings, ensuring your legacy retains its value even in your absence.

3. Harmony in family dynamics

Assets can be a double-edged sword, often becoming a bone of contention among family members. A clear, unambiguous legacy plan cuts through potential disputes, ensuring seamless distribution. From designating the primary financial custodian to tailoring unique plans for individual beneficiaries, legacy planning offers clarity and precision. 

writing will

While there are specialised services to assist in organising your financial matters, it is also feasible to undertake your own legacy planning. Here's what to expect:

1. Draft your will

The primary step in any legacy plan is creating a will. This is a legal document that dictates how your assets should be distributed after your death. Everyone, irrespective of the size of their estate, should have a will to ensure their wishes are respected.

If you're venturing into will-writing without prior experience, seeking the guidance of a seasoned lawyer can be beneficial. You also have the option of online will writing platforms, offering user-friendly templates and resources to help you craft a comprehensive will. It is advisable to revisit your will from time to time. This is crucial after experiencing major life events, such as marriages, births, or acquisitions of significant assets, to ensure that your testament accurately reflects your current wishes and situation.

2. Make CPF nominations

Bear in mind that your Central Provident Fund (CPF) savings fall outside the purview of your will. However, you can still control who inherits your CPF savings through a CPF nomination. This will cover the savings within your CPF Ordinary, Special, MediSave, and Retirement Accounts, and any unused premiums from CPF LIFE. To ensure a seamless transition of these assets in line with your legacy planning, you can make a CPF nomination either online or in-person at a CPF service centre.

3. Set up trusts

A trust is a protective tool designed to safeguard family assets, especially when intended beneficiaries are either too young to handle a significant inheritance or may not have the financial acumen or stability. Through a trust, the release of assets to these beneficiaries can be postponed until they attain a specific age or demonstrate financial maturity.

4. Make a Lasting Power of Attorney (LPA)

In Singapore, you can allow your trusted person(s) to make personal welfare and/or property & affairs decisions on your behalf should you lose mental capacity in future, by appointing them as your Donee in your LPA. You may complete the online LPA by logging in to the Office of the Public Guardian Online (OPGO) portal using your SingPass your Donee(s) and Replacement Donee (if any) will be notified to login to OPGO using their SingPass to accept their appointment. You will then need to visit a certificate issuer to certify your LPA before it is submitted for registration via OPGO.

5. Consider Advance Care Planning (ACP)

Should you face a severe illness or injury that prevents you from making decisions for yourself, ACP ensures that your doctors and caregivers are aware of your care decisions and treatment preferences. ACP discussions, often encompassing topics ranging from treatment options to end-of-life care, can be meticulously documented.

This record stands as a reference point for medical professionals as it ensures that your voice is still heard even when you cannot speak for yourself.

6. Have a comfortable retirement in mind

Legacy planning isn't just about what you leave behind; it's also about ensuring you have a comfortable life in your golden years. This means setting aside enough resources for your retirement. Consider factors like living expenses, potential medical bills, travels, and other desired leisure activities. Planning for a comfortable retirement ensures that your assets aren't depleted due to unexpected late-in-life expenses.

As you continue to achieve success and reach important milestones like getting married, buying your first home, having kids or expanding a business — it’s important to ensure that your financial masterpiece is well protected. In addition to legacy planning, one of the best ways to do that is with life insurance.

There are several types of life insurance policies available. Income’s TermLife Solitaire, for example, may provide the protection you need to ensure your financial masterpiece remains intact and preserve your legacy.

What is term life insurance?

Term life insurance provides you with protection over a fixed period of time, which can range from 10 to 40 years or up to a specified age (e.g. 100 years old), depending on the policy. During the policy term, should death or terminal illness occur, the sum assured will be paid1.

Unlike other types of life insurance, term life policies do not have an investment or savings component (i.e. cash value). The primary objective here, especially in legacy planning, is to ensure your loved ones are provided for and your business interests and financial commitments are taken care of if you are unable to provide the income to meet your obligations.

family playing around

TermLife Solitaire provides high insurance protection against death and terminal illness1, catering to those keen on legacy planning. It provides a wide coverage term range (up to age 100), with the option to add on riders for extra coverage against TPD (before the anniversary immediately after the insured reaches the age of 70) and enjoy a waiver of future premium payments during the rider term.

Here are several key benefits that Income’s TermLife Solitaire provides:

  • High Coverage - Stay protected against death and terminal illness with a sum assured1 of $500,000 or more
  • Guaranteed Renewal - Option of renewing your policy to continue your coverage after your policy term expires with guaranteed renewal2 up to a maximum age of 100 (last birthday)
  • Enhanced Coverage Options - Enhance your life insurance coverage with a variety of riders such as Disability Accelerator3, Hospital CashAid4, Essential Protect5 and several premium waiver options
  • Payment Frequency - Make premium payments monthly, quarterly, bi-annually or annually

What Makes Income’s TermLife Solitaire Different?

What sets Income’s TermLife Solitaire apart from other policies is that it’s well-suited for those who want to safeguard their financial masterpiece — their legacy and their business.

TermLife Solitaire protects your legacy

TermLife Solitaire provides you with peace of mind that in the event you pass on, your family will not have to experience financial hardship. With the policy’s extensive protection of $500,000 or more, you can rest assured that your family’s standard of living will not be affected — your financial obligations such as your mortgage can be paid off, your kids can continue with their education and your spouse won’t have to experience further financial hardship.

Here’s a simple example of how Income’s TermLife Solitaire would protect a couple that purchased policies for each other:

Mr and Mrs Tan, both age 40, non-smokers, sign up for TermLife Solitaire, insuring each other’s lives with a sum assured of $1,000,000 each and a policy term till age 100. They add a Payor Premium Waiver rider6 with a maximum term till age 84 and a Disability Accelerator rider3 with a sum assured of $1,000,000. They also choose to pay premiums on a yearly mode. 

Policy 1: Mr Tan purchases TermLife Solitaire on the life of Mrs Tan. 

Yearly premium = $4,510 (including premium for Payor Premium Waiver rider6 and Disability Accelerator rider3 

Policy 2: Mrs Tan purchases TermLife Solitaire on the life of Mr Tan. 

Yearly premium = $5,705 (including premium for Payor Premium Waiver rider6 and Disability Accelerator rider3

Should Mr Tan be diagnosed with total and permanent disability at the age of 60, Mrs Tan will receive the payout of $1,000,000 from Policy 2, which can be used to pay off any outstanding loans and help the family maintain their current lifestyle. Policy 2 terminates.

Policy 1 insuring Mrs Tan will remain in force with future premiums waived until Payor Premium Waiver rider6 term expires.

By the time Mrs Tan reaches 100 years old, Policy 1 concludes its term.

TermLife Solitaire protects your business interests

TermLife Solitaire provides you with the security of knowing that in the event of your passing, all of the hard sweat and labour that you poured into your business will not go to waste. If you own a small business, the policy’s coverage of $500,000 or more in protection can ensure that business debts and expenses are covered — so your business can continue to thrive and serve customers.

Here’s a simple example of how Income’s TermLife Solitaire would protect a middle-aged business owner:

Mr Ong, a non-smoker, is a director of ABC Company, and crucial to the success of the business. To ensure business continuity in case of the unexpected loss of Mr Ong, ABC Company signs up for TermLife Solitaire to insure him.

Sum assured: $2,000,000.

The company also adds a Disability Accelerator rider3 with a sum assured of $2,000,000 and chooses a policy and rider term of 15 years.

Yearly premium = $3,863 (including premium for Disability Accelerator rider3

The coverage of $2,000,000 can be used to cushion the business impact of losing Mr Ong if any of the following occurs:

  • Death
  • Terminal illness
  • Total and permanent disability

The term of the policy and its associated rider will end when Mr Ong turns 65.

You will not know if or when life's uncertainties will occur, and it's important to have the right protection in place before any unfortunate events happen.

To learn more about how this policy can integrate with your legacy planning efforts, check out TermLife Solitaire or connect with a financial planner today.

Jeff Cuellar writes about personal finance, healthcare, lifestyle, and career issues in Singapore.

Related Articles

What Happens If Your Parent Dies Without A Will-image
Estate Planning
Finance Matters

What Happens If Your Parent Dies Without A Will

Most people find it difficult to speak with their parents about writing a Will. Find out about the implications of not having a Will, and how you can write one.
byAlvin T'ng
  • Apr 13, 2022
  • 6 mins
Estate Planning
Estate Planning Singapore-image
Estate Planning
Finance Matters

All You Need to Know About Estate Planning in Singapore

What is estate planning? Find out how a will, CPF nomination, and inter vivos trust can help.
byJoanne Poh
  • Aug 05, 2019
  • 10 mins
Estate Planning
Legacy Planning in Singapore-image
Estate Planning
Family , Finance Matters

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

The best gift you can give your family.
byElena Owyong
  • Jan 24, 2018
  • 2 mins
Estate Planning