1. Low threshold of insurance trust: At present, the threshold of domestic family trust is high, and millions of funds can be used for trust. However, insurance has a leverage effect, and the amount of insurance can reach the threshold of trust, which reduces the threshold of trust to some extent.
2. Break through the beneficiary restrictions: the designation of trust beneficiaries is flexible, not limited to immediate family members, and even includes the unborn third generation.
3. Flexible payment arrangement: The trust can flexibly set the payment plan according to family needs, so as to determine the payment amount and payment time and effectively allocate funds.
4. Debt isolation: Insurance trust makes insurance money independent of property and does not participate in the beneficiary's debt repayment or property division.
5. Secondary beneficiaries can be designated: secondary beneficiaries can be designated. If the primary beneficiary does not meet the payment conditions, the secondary beneficiary will distribute the remaining trust property equally to prevent the property from flowing out.
Second, the disadvantages of insurance trust
1. Property is not independent: before insurance claims, the policy property will be affected by the policyholder's debt, marriage division, etc., and the wealth preservation function is weak.
2. Leverage has limitations: the leverage of domestic policies is relatively weak, and it still needs more self-owned funds to support it, which is not suitable for ordinary families. At the same time, the interest rate of policy loans is high, and there will be no small interest pressure to amplify leverage with policy loans.
Trust function of insurance money
(1) can realize the financial management wishes of the insured before his death.
The combination of life insurance and trust is not an imaginary financial service, but a strong and objective market demand. As mentioned above, one of the most important functions of an insurance trust is to realize the wishes of the principal.
The initial principle of trust is to help clients manage and use related assets according to their requirements. As a combination of life insurance and trust, insurance trust has special functions.
After the death of the party concerned, the most worrying thing should be whether his family can live a good life, whether his family can make good use of the assets left by him, whether the descendants who fail to live up to expectations will squander all the family fortune they can get right away, and so on. This kind of worry can be solved by insurance trust.
If the insured adopts the trust method, he shall entrust the management of the insurance benefits to a professional team, sign a trust contract, stipulate that the trustee shall manage the funds according to the client's own arrangements, and distribute the survival funds to the trust beneficiaries on a regular basis, or stipulate the relevant grade conditions required for receiving the benefits, so as to realize the wishes of the client.
(2) The combination of life insurance and trust has the dual effects of saving, investment and financial management.
If the beneficiary is simply allowed to receive insurance benefits, another problem is the preservation and appreciation of funds. Investment and financial management is a job that needs professional knowledge very much. For most people, their investment channels are mainly depositing in banks or buying high-risk stocks. Such an investment strategy is undoubtedly rough and easy to lead to asset depreciation.
And if it is handed over to a very professional trust institution, it can achieve the dual effects of savings and investment and financial management. Trust institutions have more professional channels and stronger investment ability than individuals, and can maintain and increase the value of assets better than individuals.
(3) It has the function of tax exemption in estate planning.
In some countries and regions where gift tax and inheritance tax are levied, insurance trust has become an important tool for estate planning. Leave the assets to the beneficiary in the form of insurance trust. In our country, the general operation process is that the insured buys life insurance, signs an insurance trust contract with the trust institution at the same time, and makes another agreement with the insurance company: after the insurance accident, the insurance premium will be paid directly to the trust account opened by the bank for the children, and the beneficiary of the insurance contract is still the children, and the insured still retains the ownership of the insurance contract. This kind of insurance trust is called "self-beneficial trust". This can not only reduce the inheritance tax under legal circumstances, but also arrange the expenditure of insurance money reasonably, killing two birds with one stone.