Wednesday, November 29, 2006

Set aside money for your grandchild

A friend wanted to set aside some money to be given to a grandchild when he reaches the age of 25 years.

Here is a suggestion. Take the Flexi-Link policy in the name of the grandparent, and nominate the child as the beneficiary.

The grandparent will have control over the policy during her lifetime.

On the death of the policyholder, we will transfer the policy in the name of the beneficiary and continue it for the remaining term. If the beneficiary is still a minor, the parent can act as the guardian.


Allen Lim, ChFC said...

Can Section 73 of CLPA applies to grandchildren? The statute states it is only for man(or woman) for the benefit of his children. Could you (Mr Tan) comment on this.

allen lim.

Tan Kin Lian said...

Dear Allen,

You are right. Section 73 applies only to a a person taking a policy for the benefit of the spouse or children.

For a grandparent, a trust policy can be taken, but it will not enjoy the special protection of section 73.

I will rewrite my posting.

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