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Wealth Giving Are You Planning Your Insurance Effectively?

Are You Planning Your Insurance Effectively?

Hainan,China
By Martin Wong
March 01, 2021
Tatler+
While building and protecting wealth is important, ensuring its smooth transition from generation to generation is equally key

Over the next 25 years, the world will experience the largest intergenerational wealth transfer in history. Tens of trillions of dollars will be transferred from baby boomers to their children, bringing about significant changes for everyone.  Now, with as many high-net-worth individuals in Asia as there are in Europe, the affluent in Singapore are tapping into insurance products for wealth planning. 

Between March 2019 and July 2020, Singapore added three more billionaires to its tally, as Asia held on to its status as the region with the most uber-rich individuals in the world. The Asia-Pacific region holds a record 831 billionaires, about 38 per cent of the global total number. They account for US$3.3 trillion ($4.49 trillion) of total wealth, possessing—on average—US$4 billion each.

(Related: 5 Ways To Successfully Manage A Generational Transfer Of Wealth)

Effective and secure wealth transfer requires multiple strategies

Early planning and holistic wealth management are critical in helping to safeguard legacies, especially during times of economic uncertainty. And with the Covid-19 pandemic having significantly escalated the overall risk environment, the need for protective solutions has become ever more essential, if not critical.

As insurance can mitigate issues emerging from diverse sources of wealth, its solutions play an important role in wealth management among Singapore's wealthy, with a huge majority of them incorporating insurance into wealth and legacy planning.

In particular, high-net-worth individuals in Singapore are starting to look beyond basic life insurance coverage towards more holistic protection offerings, including healthcare support, estate planning, tax optimisation, business succession and debt risk mitigation.

(Related: 5 Impact Funds Worth Investing In)

Engage the expert that can work with your unique needs

The author of this article is Martin Wong, Chief Executive Officer, Charles Monat Associates, Singapore.
The author of this article is Martin Wong, Chief Executive Officer, Charles Monat Associates, Singapore.

Many of those who have successfully implemented succession planning worked closely with experienced and trusted advisors like brokers who can provide the necessary resources, framework and guidance on compliance, tax and risk minimisation.

These advisers are also able to provide a valuable perspective on an individual’s asset portfolio and family circumstances to identify policies that satisfy current and future needs of the family. In addition, they can also assist with transitions of control to safeguard the future of family businesses and the livelihood of its employees. It’s evident that this expertise, working in conjunction with the right insurance policies, has far-reaching benefits that extend to people beyond the members of high-net-worth families.

During its 50-year journey thus far, Charles Monat Associates has helped secure the wealth of the wider region, and witnessed the evolution of Singapore as a financial hub. The company has built intergenerational relationships with its clients to become trusted long-term advisors who protect and preserve their legacies for generations to come. It has been these close partnerships that have facilitated successful succession strategies and formed relationships with families that have transcended generations.

(Related: Singapore's Youngest Billionaire Kishin RK On How He Is Disrupting The Real Estate Industry)

Why insurance is crucial in wealth planning

Life insurance is evolving into a powerful asset for the succession planning toolbox. For life insurance opportunities to be fully realised, a tailored policy can remove uncertainty and avoid unknowns. High-net-worth individuals are a diverse segment and face specific challenges based on the source of their wealth. These challenges are well-suited to insurance solutions and there is an opportunity to increase the understanding and awareness of how insurance products can augment wealth planning.

Statistics that have been taken from professional surveys indicate that there are considerably more high-net-worth individuals in Singapore—as compared to those in other parts of Asia—who have incorporated insurance products into their wealth-planning strategies. Most of them utilise insurance for succession and legacy planning, which demonstrates their trust in the relatively high financial security of insurance companies.

Besides offering this security, a reputable insurance company like Charles Monat Associates will understand the nuances of the Asian market and can provide clients with bespoke policies that take into account individual circumstances like family dynamics and asset structures to ensure the smooth execution of wealth transfer.

(Related: KSK Group CEO Joanne Kua On Building A Successful Family Business In Asia That Can Last Generations)

Start early to secure success and safeguard your legacy

It comes as no surprise that effective succession planning does require time. Insurance can play an important role in guarding against issues arising from illiquid estates or outstanding debt. It can also enable high-net-worth individuals to plan ahead and allow their beneficiaries to maintain their lifestyles.

While it is true that insurance solutions can help to diversify investment portfolio risk through stable returns and leveraging, trusted advisors must first understand individual circumstances to provide solutions that will guarantee success. Get time as well as the right professionals on your side—Charles Monat Associates can help you develop a successful strategy that will provide peace of mind and safeguard your family legacy.

Discover more at charlesmonat.com

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Wealth & Giving Charles Monat Associates wealth management insurance legacy planning

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