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The Missing Piece in Your Financial Portfolio: Life Insurance

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Berry Wong, Chief Executive Officer, Charles Monat Associates, Hong Kong

This is a sponsored advertorial from Charles Monat Associates

The number of High-Net-Worth Individuals (HNWIs) across Asia Pacific has exploded over the last decade. The region is home to the highest number of millionaires in the world and the largest share of global assets. In China alone, almost 81 million people joined the fast-growing club owning $100,000 to $1 million worth of assets between 2016 and 2019. As of July last year, there are 415 Chinese billionaires with a combined wealth of $1.7 trillion.

Growing in tandem with this eye-watering wealth is the need to preserve and manage it. Yet, when you ask HNWIs what their financial portfolios consist of, you’d often find one critical component is missing – life insurance. This is particularly true in Asia, where underinsurance is pervasive, and the consequences for individuals and families in lost wealth and lifestyle can be harrowing.

The value of life insurance for HNWIs goes far beyond life coverage

The connection between wealth planning and life insurance is often misunderstood – far beyond traditional life coverage, life insurance policies can become a family’s most valuable asset. They provide predictability, flexibility and importantly, liquidity – allowing individuals and families to structure their wealth to suit their own unique needs.

Liquidity is crucial for affluent families, especially as increases in wealth usually coincide with a growth in illiquid assets such as property. During times of distress and sudden shocks, life insurance can provide a source of liquidity, helping to buffer against economic headwinds, create cash flow continuity, and avoid undervalued asset selloffs.

Insurance and trust are the foundation of legacy and succession planning. In Asia, where families and businesses are often intertwined, life insurance allows control to be shifted to family members who are active in the family business whilst equalizing the estate for those who wish to forge their own path. Consider this scenario: three members inherit an equal share of a business, where one wants to sell and two wish to retain ownership – a clear recipe for family feud. Life insurance allows the two family members with an interest in maintaining the business to inherit the asset, while the other member is provided with an equivalent cash value from the life insurance policy.

In the next two decades, legacy and succession planning will become ever more important for HNWIs as the largest intergenerational wealth transfer in over a century takes place. This seismic transition will see trillions of dollars exchange hands across multiple jurisdictions, increasing the need for solutions that combine liquidity creation with wealth preservation.

With five decades of experience and expertise, Charles Monat Associates has a deep understanding of what lies ahead and how best to help HNW families navigate this complex landscape.

Tailoring products to help HNW families

Throughout our 50-year history, Charles Monat Associates has had the privilege of serving over 8,000 wealthy families and individuals with customized life insurance solutions. We recognize that life insurance products are changing rapidly, empowering families with new types of policies designed to suit their lifestyles.

Private Placement Life Insurance, for example, can provide flexibility to top up policies during times of wealth expansion, ensuring that liquidity protection will grow alongside wealth. Whole Life Insurance provides peace of mind during volatile economic periods as dividends remain protected from the stock market and guarantee consistent returns.

These new policies can be complex and should be managed by professional and trusted advisors who understand the landscape and can tailor insurance-based solutions to individual family circumstances. Expert advisors can even rebalance current insurance policies to achieve more holistic coverage.

Create certainty for yourself, your family and your future

The growing suite of life insurance assets and the value they can create differs for every family and individual. This means HNWIs often have a hard time establishing what level of cover they require and what solutions work best for them. To ease this burden, they should engage with sophisticated and reliable advisors to discover the enormous benefits life insurance can provide to guarantee liquidity and safeguard their legacies, come what may.

Placing assets within life insurance to protect current and future generations should be second nature for every HNW individual. A good investment portfolio is a diverse one, and should include stocks, real estate, a retirement fund as well as the most critical piece of the puzzle – life insurance.

This is a sponsored advertorial from Charles Monat Associates


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