High protection policies
Protecting everything you’ve built
Protecting your wealth now and for your descendants can be a complex process. In unpredictable social and economic times, it is more important than ever to ensure your legacy is not only secure but can prosper.
One of our most important preservation strategies for high-net-worth clients is life protection insurance. It can help insulate your wealth from unexpected events and global-market volatility and help prevent arguments over your estate.
With your fortune preserved, you can plan for a comfortable, well-funded retirement and be confident that the lifestyle your beneficiaries enjoy today will continue.
Let’s learn a little more.
Protecting what matters
In essence, life insurance can enable you to enhance the amount of wealth you have to transfer. Including life insurance in your legacy planning is a smart way to protect your family’s wealth and ensure your loved ones are taken care of.
Increasingly, high-net-worth clients choose life insurance as an alternative asset class for diversification and liquidity to protect wealth and manage risks.
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At PCS by Mercer, we offer two kinds of life insurance with high protection:
- Whole of Life
- Universal Life (including Indexed Universal Life and Variable Universal Life)
- Whole of Life
Both Whole of Life and Universal Life combine life protection coverage with savings elements. And in most cases, policy holders can borrow against the cash value of the policy. Whole of Life and Universal Life are popular insurance plans for high-net-worth clients who want protection for their family, wealth transfer, and estate-equalization solutions.
Whilst there are individual product variations within the two categories, there are also some fundamental differences between Universal Life and Whole of Life products. Whole of Life policy benefits and contributions are guaranteed and level. Universal Life provides flexibility in lieu of those guarantees. With Universal Life policies, you have more flexibility to structure the policy according to your needs – like overfunding in the policy.
Whichever option works best for your wealth-planning needs, a life insurance policy can have multiple benefits for both your family and your business.
Family benefits
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Life insurance provides:
- Immediate liquidity for loan liabilities, debts and lifestyle maintenance
- A reliable source of income replacement
- An inheritance for loved ones who are not heirs
- Potential cover for estate duty and inheritance taxes
Business benefits
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Life protection insurance can be a helpful tool because it has the ability to:
- Provide immediate liquidity for business liabilities, ensuring minimal disruption to operations and market perception
- Be used to create offshore assets
- Allow for business legacy and estate equalisation
- Provide funds for a Buy-Sell Agreement and become part of a Senior Executive Retention Plan. If a key person dies, life insurance will compensate for a drop in business earnings
Life insurance as a wealth creation tool
As an alternative asset class, life insurance offers more than just diversification. It can also help you to grow your wealth, with guaranteed returns of around 1-2+%.
Life insurance can also provide retirement or emergency funds for the next 30-40 years in the form of the cash value of your life insurance policy.
More ways to grow wealth and plan for retirement
Retirement planning can also involve legacy planning for your family and succession planning for your business.
Life protection insurance can help with both.
The assets of high-net-worth individuals often increase quickly. It’s important to stress-test your insurance regularly to ensure your coverage is adequate and that you have provided for all eventualities.