I come across instances of parents who have named their children as beneficiaries of their life cover so often I have decided to write about this again. I don’t want to see any of my customers’ children appearing on “I Blew It”. As parents, we take life cover because we want to ensure that if we die while our kids are still young then the life cover payout will be used to pay school and university fees of our children. Many parents then put their children as beneficiaries of the life cover. Imagine a 10 year old with R1million+ in their bank account! Well, it will not happen. The money could end up being paid to the parent of the child e.g. baby mommy or baby daddy or the guardian of the child. The bottom line is when you name your young children as beneficiaries of your life cover, you really don’t know what would end up happening to that money and it might end up being used for other purposes e.g. renovating homes, buying nice cars, holidays, etc… Your children might end up not finishing their studies due to lack of money when you actually had sufficient life cover.
So what can you do to ensure that your life cover is used for the education of your children, in case you die while they are still young? You must draft a Will and set up a testamentary trust for minor children within the Will. You can then nominate your Estate as the beneficiary of your life cover. The Will then will have to make provision for the life cover to flow through the estate to the testamentary trust(s). At ThuthukaSA, we help our customers to draft Wills in the manner stipulated above so that if our customer passes on then we know that their kids will continue with school / university. We set up the Wills to ensure that your kids receive the balance of your life cover when they are a little mature. Most parents usually choose age 25 or even older for the balance to be paid out. They make provision that when the kids finish university, they can be given money to buy their first cars or first apartments, etc… Your children have a slim chance of blowing your money when you have a properly drafted Will. If you have adult children and you want to leave money for your grandchildren, you can also draft the Will to ensure that your life cover is used for the school and university fees of your children
Fees to draft a Will
We charge R550 upfront, one-off fees and annually you would pay R172 in safe custody fees. You can email email@example.com if you want us to help you draft a Will