D. LIFE INSURANCE
TRUST
Life Insurance is the best means of creating an instant estate and providing liquidity to your estate by making the necessary funds for estate available upon death.
The benefits of life insurance can be maximized by setting up a Life Insurance Trust by appointing a trustee to receive and/or manage the proceeds of insurance policies upon death. It is designed to meet the needs of individuals or heads of families whose major objectives is security and financial independence for the beneficiaries.
The trustee for revocable or irrevocable beneficiaries can act as such with either one of the following functions:
- Collect the proceeds from the insurance company and distribute in lump-sum to your designated beneficiaries subject to the other conditions specified in the trust agreement; or
- Collect the proceeds from the insurance company, manage and invest the fund and effect the periodic and final distribution thereof to your designated beneficiaries, subject to other conditions specified in the trust agreement.
Kinds of Life Insurance Trust
- Unfunded Life Insurance Trust
The subject of Unfunded Life Insurance Trust are insurance policies whose premiums are fully paid or regularly paid by the trustor/insured directly to the insurance company. The trustee undertakes the safekeeping of the original copies of the insurance policies, including the official receipt of premium payments.
- Funded Life Insurance Trust
A Funded Life Insurance Trust would require the insured/trustor to maintain an Investment Management Account (IMA) with the Trustee. The Trustee assumes the responsibility to manage and invest the fund to meet scheduled payment of insurance premiums. The trust agreement authorizes the Trustee to deduct from the trustor’s maturing placements the amount due to the insurance company.
Market
Product offering shall focus on existing TS clients and DBP employees through Personnel Administration, which may cover the current insurance coverage provided by the Bank.
Trust Fees
Unfunded Life Insurance Trust – P500 p.a. safekeeping fee per insurance policy
Funded Life Insurance Trust – P500 p.a. safekeeping fee per insurance policy plus 1/5 of 1% to principal amount of placement deductible every maturity. Actual rate of fund management fee is dependent on the amount of cash to be placed with TS.
Documentation
Life Insurance Trust Agreement shall be prepared in accordance with the existing BSP guidelines on trust operations.
E. MORTGAGE TRUST INDENTURE (MTI)
MTI is an arrangement executed by and between a borrowing/mortgagor and another party, called a Trustee, whereby the former mortgages his properties to the latter acting in such capacity for pari-passu and pro-rata benefits of the mortgagor’s creditors. The creditors receive from the Trustee Mortgage Participation Certificates (MPCs) evidencing their interest in the mortgage.
Advantages
- Each creditor has first mortgage and a security interest in and to all properties of the borrower/mortgagor which are subjects of the mortgage.
- Convenience - there is no need to submit separate sets of collaterals to various creditors.
- Systematic review of mortgaged assets.
- Documentation is made simpler when there is frequency in the change of creditors’ list.
Services to be rendered by Trustee
- Custody of Documents
- Determination of adequacy of collateral cover
- Issuance of MPCs
- Registration of the MTI and any amendments thereto
- Monitoring of insurance coverage and real estate tax payments
________________________________________________________________________
Would you like to inquire further about these products and services? Fill-up this form or contact us at any of these numbers:
Tel nos. (632) 815-0950, 840-2796, 818-5444, 894-5919
1 | 2 | 3 | 4