On The Establishment Of Life Insurance Trust System In China

Life insurance trust means that the client enters into a life insurance contract as wellas a trust contract in which the insurance money is the trustproperty.When the insurance accident happens or the insurance periodexpires, the insurance company should deliver insurance money to the trusteeaccording to endorsement of the life insurance contract. Then trustee manages anduses insurance money in accordance with the terms of the trust contract, anddistributes the trust income to the beneficiaries. The trustee shall hand overinvestment income to beneficiaries as well as the remaining insurance money whilethe trust period expires.Life insurance trust is different from investment insurance and investment trustbecause of its powerful protection features,that is the reason we call to build a lifeinsurance trust system in China. Based on the necessity and feasibility, a complete lifeinsurance trust institution is established. The operation of the life insurance trust islike this: insurance money is the trust property, insurance company is an intermediary,trust investment company is the trustee, and insurance company will take theresponsibility of coordination. This system is applicable to two situations: theinsurance beneficiary is without civil capacity or with limited civil capacity; a largeamount of insurance money. Life insurance trust agreement shall be established inwriting. Meantime, the client must have full civil capacity, and trust investmentcompany shall meet the statutory scale with a sound internal management andqualified life insurance trust practitioners. It is very important that in the course of theoperation of life insurance trust, the trustor, the beneficiary and the trustee shallexercise their rights strictly and reasonably, and fulfill their obligations earnestly inaccordance with the contract. At the same time, the client can independentlyelects supervisor to protect the purpose of the life insurance trust, andthe supervision of the People’s Bank of China is another powerful protection to the security of life insurance trust.