No Medical Insurance Needed If You Afford It
Real case sharing :
A client ( Madam Tan , breast cancer patient for years , mother of 1 girl and 1 boy ) took up the life and medical insurance policies for the kids in year 2006 .
She passed away in year 2010 .
Right before her passing , i managed to see her to have the policies transfer as such :
Elder girl by then age 18 ,absolute assignment the policy to elder girl directly
Younger son age 14 , conditional assignment the policy to father ( Mr. J) as policy owner .
Unfortunately the father (Mr. J )passed away last month due to acute heart problem . At this year of 2014 , the younger son reach majority age of 18 .
I manage to contact the deceased client 's sister (Ms. Tan ) , in order to have policy ownership transfer back to the son since he is qualify to own his policy now .
Ms. Tan has shown great concern of the children ( her niece and nephew) 's insurance policies as now both parent passed away and both children still in study . In order to avoid any potential termination of the policies , she pick up the responsibility as payer role for the continuity of the policies.
In this meet up , i was trying to understand the estate distribution progress done since client (Madam Tan ) passed away in year 2010 . I have provided the will writing services to her via Rockwills . The distribution completed by Mr.J who is first appointed executor and trustee in her will .
Mr. J did not have a proper will in such short emergency fatal heart event . I have explained the small estate distribution method in land office if he fit in the criteria , or else seeking lawyer for high court submission will need to be done.
Mr. J 's emergency admission , by-pass for blockage arteries , discharge , readmission and warding in ICU due to virus infection till his passing in total duration of 6 weeks , the total medical bill amounting to RM220K( Ringgit Malaysia Two Hundred Twenty Thousand ) . Mr. J did not own any medical insurance .
As the children are young and studying , this hefty medical bill was settled by Mr.J 's sister , Ms.J.
Ms. J , a single and approaching her retirement age , kind-hearted to pick up this brother's hefty medical bill using her retirement fund .
The boyfriend of the daughter ( age 22 now) , has seem trying to help her claiming father estate , including only 1 life insurance policy and EPF .
Its a blessing both children still having Ms.Tan ( Aunty from maternal side ) and Ms.J (Aunty from paternal side ) to help them out in recent events , and provide guidance to these children ( at the age 22 and 18 respectively ) for future undertaking .
Question to ponder :
(1) What if Mr.J do not have relative afford to pay medical bill upon his passing ?
(2) What if died insolvent and kids having difficulty for study continuation?
(3) What if he left hefty asset that will be inherited by children as this young age , and could potentially cause bad intention from friends ?
(4) Ms. J 's retirement fund is shrinking quickly since RM220K has used up for brother's medical bill , will she face problem in retirement age ?
(5) Is Mr. J 's estate enough for the kids reimburse the aunty settlement help for this RM220K ?
The recommended steps that we could have arranged in advance as such :
(1) If you are rich and budgeted enough sum for potential health hazard , by all means you do not need to have the medical insurance .If not , please do not save a penny , lost a dollar , and create life anxiety for your family .
(2) Put your dedicated assets ( such as cash account , insurance policies , immovable properties) to a living trust . This trust can be designed in priority for settlement such as :
(a) own medical expenses
(b) funeral expenses
(c) Estate distribution expenses
(d) others estate debts settlement ( eg: home mortgages , personal loan , credit card debts etc .)
(e) children living expenses payable monthly
(f) tertiary education funds disbursement
(g) others ( eg : own parent old age need )
(h) balance funds distribution method ( to hold till beneficiaries age 30 or partially distributed in different age band ...)
With this method , you avoid unnecessary potential third party eyeing on the inheritance a young person may have .
Tuesday, March 25, 2014
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