10 December 2018 |

Succession Planning: Life Insurance and Succession Planning (Executive Summary Part 3)

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Research suggests that, by 2020, Asia – which today has the world’s largest HNW population – could be home to more than US$14.5 trillion in HNW wealth. Asian Private Banker’s ‘Succession Planning 2018: Perceptions and Opportunities for HNWIs’ report, sponsored by Transamerica Life Bermuda, explores the industry’s perception of succession planning, clients’ needs for effective wealth transfer and wealth preservation, and the role of HNW insurance solutions in succession planning.

Download your complimentary copy of the Succession Planning 2018: Perceptions and Opportunities for HNWIs executive summary today to read exclusive findings.


Traditionally, succession planning has been dominated by time-tested means, such as wills and trusts. However, complexities arising from regulations and taxes have been growing globally. Clients in need of fiscal optimisation are progressively seeking alternatives that could ensure an unscathed wealth transfer to their successors in such an environment. One of these alternatives is life insurance policies, which RMs and end-clients rank as one of their top three succession planning tools.

How would you rate the following succession planning tools in terms of contribution to your clients’ succession planning needs?

According to our contributing RMs, apart from universal life insurance, end-clients use other succession planning tools, the most important being joint investments, whole of life insurance policies, annuity products, and trusts.

Apart from universal life insurance, which of the following financial products are you using as succession planning tools

27% of RMs said less than 20% of their clients treat life insurance as part of their succession plan, but 26% of RMs also said more than 80% do so. Such an inconclusive trend can be traced to differences in RMs’ perceptions as well as training at different institutions that might have different philosophies to approaching succession planning, thus leading to differences in training that can include or exclude life insurance as a succession planning and wealth transfer tool.

What percentage of your clients use their universal life insurance as part of their succession plan?

81% of the surveyed RMs have discussed HNW succession planning solutions with their brokers. Brokers are equally interested in initiating conversations around succession planning insurance solutions with their distribution channels, with 80% of RMs reporting that their brokers have introduced them to a HNW succession planning insurance solution.

Have you ever enquired with your broker about a HNW succession planning insurance solution? / Has your broker introduced you to a HNW succession planning insurance solution?

For clients, lifelong coverage, death benefit, high coverage amount, and guaranteed benefit are the most important policy features that a succession-focused insurance solution should address. Premium financeable, however, remains remarkably low, which can be attributed to the fact that given their wealth, end-clients prioritise other features that do not determine only their asset allocation but also the economic security of themselves and their families.

Rate the following features in terms of their importance when choosing a succession planning-focused life insurance solution

When it comes to selecting succession planning tools from an insurance provider, RMs said financial strength/rating is of the highest importance to their clients, while end-clients believe that servicing and responsiveness of their insurance brokers are the top priorities. As in the case of perceived risks, RMs tend to put greater importance in product features of HNW succession planning tools. Overall, RMs rank the importance of each characteristic significantly higher (1.4 higher on average across all options) compared to end-clients.

According to our sample population of RMs, the top three preferences of providers of succession-focused insurance solutions are AIA, Transamerica Life Bermuda, and Manulife Hong Kong/Singapore, respectively. It is important to stress that Transamerica Life Bermuda enjoys high popularity among a certain demographic group within the UHNW population as well as life insurance professionals in terms of succession-focused life insurance solutions.

The research team at Asian Private Banker interviewed different brokers from different segments of our research sample, who indicated that Transamerica Life Bermuda is one of their top three options when it comes to HNW succession planning insurance products. This highlights the importance of a life insurance provider having a strong brand name and reputation, especially vis-à-vis market-entry strategy towards a targeted demographic, which was highlighted in our 2017 report.

Which insurance providers do you associate with HNW succession planning insurance solutions?

Of the RMs who associate Transamerica Life Bermuda with HNW succession planning insurance, 45% work at Swiss/Euro-headquartered universal banks and 26% are from External/Independent Asset Managers or multi-family offices.

What best describes the institution you work for?
(among RMs who chose Transamerica Life Bermuda)


Read Part 1 of the report, “Succession Planning: Life Insurance Market Landscape (Executive Summary Part 1)” published in November 2018.

Read Part 2 of the report, “Succession Planning: The Concept of Succession Planning (Executive Summary Part 2)” published in December 2018.

Download your complimentary copy of the Succession Planning 2018: Perceptions and Opportunities for HNWIs executive summary today to read exclusive findings.