Monday, January 15, 2018
A study from Wealth-X reported that an estimated $30 trillion in wealth will be transferred over the course of the next 30 years. The Asian Life Insurance sector will certainly experience an impact from this phenomenon as high-net-worth individuals (HNWIs) prepare to pass wealth on to future generations. As it stands, inter-generational asset transfers suffer a 70% failure rate. For family-run companies, the death of the patriarch or matriarch running the business can result in a 60% loss in value. Recognizing the difficulty in successfully transferring assets to children and beyond, family business leaders have begun taking a more active role in planning for their succession. Part of their involvement in the process includes seeking solutions from the Life Insurance industry, especially in Asia, where life policies are viewed as a safe haven for HNWIs. Because life insurance policies avoid probate and litigation is rare, these policies can aid in ensuring a smooth transition from generation to generation.
See Berry Wong, Death And Taxes: How To Effectively Transfer Wealth Amidst Asia's Aging Population, Forbes, October 16, 2017.