A big problem faced by  the life insurance industry is the many life policies with minors as beneficiaries. Typically, but not always, minors are named as beneficiaries when a single parent with a minor child takes out a life policy. A minor child is one who is under the age of 18. The Administration of Estates Act restricts the payment of monies and the transfer of movable assets to a minor from a deceased estate only. The act's restrictions do not apply to the proceeds of a policy that is not paid into a deceased estate, and may be paid directly to the minor (even though the policy proceeds are still a deemed asset for the purposes of estate duty). Some insurers make such payments, but others pay the money to the natural guardian. Both cases do little to protect the proceeds for the minor, as their natural guardian will have full access to the funds. Options Single parents with minor children and life policies should therefore set up a trust. There are two options: Set up an inter...

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