The indiscriminate nature of the current global pandemic has undoubtedly prompted many high net worth individuals and their advisers around the world to readdress and consider their mortality.
Given that this plan is available in over 150 countries, many agree that Permanent Life insurance represents a perfect match for their client’s international circumstances, writes Ashok Sardana, founder and managing director of CFS Group.
What is it?
Permanent Life insurance is a highly flexible lifetime insurance solution offering bespoke succession planning options that can help avoid a financial catastrophe in the event of a loss of a loved one, business partner or key man to a business.
Few other plans compare; especially given that, over time, while offering a lifetime of insurance cover, an accumulating cash account will, in most cases, exceed the total premiums paid.
Plans are offered by a small selection of the world’s largest, most respected and highly rated insurance providers, offering further reassurance and security to participants.
Your clients will enjoy predictable growth in cash value, which incorporates a protective layer of guarantees coupled with ongoing flexibility and accessibility.
This provides options for withdrawals in the future, alleviates risk and clients still have insurance in place for the rest of their life. This is the flexibility today’s global high net worth clients require most.
For the right type of client, this is undoubtedly one of the most flexible, affordable plans on the market today, which not only offers a protection element but also a secure opportunity to accumulate a large capital value with underlying guarantees.
Who is it for?
With a minimum sum assured of $1m (£772,000, €850,000), these permanent life insurance solutions are designed for high net worth individuals, business owners and people with illiquid assets such as property, who seek one or a combination of the following:
- Legacy and Succession Planning Solutions
- Wealth Preservation
- Key Person Protection
- Business Continuity
- Charitable giving options
- Inheritance tax planning
I often remind clients that, regardless of their accumulated wealth, they should live their life in peace not in pieces.
As such, with a straightforward plan such as this, the above issues fadeaway allowing clients to enjoy their life, their families, and their businesses.
The establishment of a Permanent Life insurance plan can easily accommodate and alleviate problematic future financial issues caused by the passing of a family member or key person in the business. Conversely, this is a living plan for participants who have options to partially or completely withdraw their accumulated reserves in the future.
How does it work?
Permanent Life insurance offers clients a straightforward, no-nonsense and no surprises protection plan, with a minimum face value of $1m.
Often the growth element is linked to tracking a respected, yet straightforward, global index such as the S&P500.
Participants can capture the majority of the upside of market movements but importantly offset any risk given that negative fluctuations in the markets are completely averted with underlying declared guarantees. Annual premiums remain flexible as long as the accumulating cash account can pay for the ongoing cost of insurance.
Premiums are transferred directly to the insurance company, adding further security given their strong and highly rated nature.
In the event of a client dying, letters of wishes which have been lodged in the application phase, are adhered to via a convenient in-house master trust arrangement, again ensuring smooth passage of proceeds to named primary or secondary beneficiaries, quickly and efficiently.
Conclusion
Permanent Life insurance offers high net worth clients a bespoke succession planning solution through highly rated and world class international insurance providers.
Conceptually, this is a simple transparent arrangement unlike many other plans, which offers sophisticated underwriting, greater flexibility, and the option for capital growth in a secure manner, over the medium to long-term.
Clients have worked hard to get where they are.
By their very nature entrepreneurs, as well as often being high-spirited can also be risktakers – it is in their DNA.
Permanent Life insurance alleviates this risk, provides security for the family and their business for future generations and employees alike.
At the same time it builds up a cash reserve that in itself can be used, for example, as collateral towards lending arrangements, to further grow their respective businesses.
No one gets out of this world alive and it is vitally important to put measures in place that are straightforward both for participants and their beneficiaries.
Such arrangements allow clients, their families, their partners and their codirectors to enjoy their day-to-day world knowing that all the bases are covered, and they can be worry free.
This article was written for International Adviser by Ashok Sardana, founder and managing director of CFS Group.
