As we get older, we tend to start thinking about the legacy that we'll be leaving behind for our loved ones. This involves putting a plan in place for maintaining, preserving and passing down wealth to the next generation. And this is especially important when you're a high net worth individual (HNWI) as there is a lot more at stake.
In Singapore, there are 124,970 HNWIs, an increase of 2.1 per cent over the previous year. These HNWIs have a collective wealth of US$0.6 trillion and their numbers are growing. These statistics are cited in a financial services analysis report by consultancy firm Capgemini in 2019. Looking after one’s wealth and ensuring that the next generation is well provided for are among the top concerns of many people, including those who are well-to-do. But times have changed. The way that affluent people think about their wealth and legacy is changing, too.
Leaving a positive legacy
Younger HNWIs are a growing economic force today. These individuals plan to leave not just a financial legacy, but also a positive social legacy to the world. How are these HNWIs planning to do this? One way is to pass down wealth, businesses and family values to their children.
In fact, 76 per cent of HNWIs in Asia think they have an obligation to transfer their wealth to the next generation, whereas only 61 per cent of their peers in the West think the same way.
However, despite the growing number of HNWIs in Asia, several studies conducted by insurance firms show that many of them are uninsured. One reason could be that the wealthy tend to underestimate the importance of insurance, thinking that they will be able to afford any unexpected costs during crises. Also, some are uncomfortable broaching the topic of death particularly in Asian societies where it is considered “bad luck” to even mention it.
According to the Asia Pacific Wealth Transfer Report 2017, only 31 per cent of respondents had a complete wealth transfer plan. Research participants were HNWIs and ultra-HNWIs living in Singapore, Indonesia, Hong Kong, Taiwan and mainland China. This is despite real-life anecdotal evidence of families being torn apart when inheritance disputes arise.
If you have worked hard for years to accumulate wealth for yourself and your family, do you think you have adequately insured your family's future – and harmony? After growing and managing your wealth, the next step should be to protect it and pass it to the right people at the right time.
Asian households value caring and providing for one’s family and maintaining harmonious relations between grown siblings and rest of the extended family.
Legacy planning can help make the process a seamless one. It allows you to distribute your wealth to your loved ones fairly and efficiently, while also maintaining harmony and avoiding unnecessary conflicts in the family. Stories of family feuds over inheritance following the death of a loved one are regular tabloid news in the media.
Such squabbles exert a heavy financial and emotional toll on families too. The right legacy planning tools can help forestall any wrangling among family members over their share of the estate, therefore protecting the family’s honour.
The Chinese have a saying “wealth never survives three generations” (fù bù guò sān dài). It takes a long time to accumulate wealth but it can be lost quickly. Money can be a sensitive topic in many Asian families – but it is necessary to emphasise the right financial planning and the right family values to protect and pass down wealth.
Being clear with how you intend to leave behind your legacy is the best way to guarantee a peace of mind as everything will be carried out according to your wishes. There will be less chance of family disputes. Most importantly, you know that your family’s financial welfare is in good hands.
With the availability of Etiqa’s Premier solutions, you can take the first step in the right direction to protect your legacy. Whether you are preserving your wealth for your loved ones, ensuring business continuity or simply looking to enjoy your retirement, Etiqa's suite of solutions are tailored to support your goals at every life stage.
Preserving your family's future
Etiqa offers a range of insurance solutions that cater to legacy planning, and its team of experienced advisers will be able to find the most appropriate one that meets your requirements and the type of premium term that best suit your circumstances.
Etiqa’s ePREMIER legacy III and ePREMIER legacy IV are SGD–denominated whole life insurance protection plans. You'll also enjoy the freedom to change the life insured. One time premium commitment to get whole life peace of mind.
Safeguarding your legacy
ePREMIER eternity presto is a whole life insurance plan that allows you to design a three-generation legacy plan, or to supplement your retirement income so you can better enjoy your golden years. You will receive a monthly income for life, starting from the first anniversary of the policy, and also receive an additional bonus as a cash sum on every 15th anniversary. The plan involves a one-time premium, with no health checks and no medical questions asked. If you prefer to pay the premiums over a number of years, the ePREMIER infinite plan could be better suited for you. This whole life insurance plan is similar to ePREMIER eternity presto where you’ll receive a lifetime monthly income, but the premium term for ePREMIER infinite is spread over four years. Policyholders will also receive an additional guaranteed cash benefit in one lump sum at every 15 policy-year interval.
Having the right life insurance plans and tools will help in growing, protecting, and distributing your wealth. It is important to consider your insurance options carefully and to choose the right solution that meets your needs.