Guide to HNW Life Insurance
Life insurance is an integral part of High Net Worth wealth management. It is a unique tool that can provide true peace of mind, helping HNW individuals to build and safeguard their wealth for generations to come. This practical handbook is designed to help provide Financial Advisors with a general understanding of the key dimensions of HNW life insurance and how to apply it in practice. It is brought to you by Hubbis and Transamerica Life Bermuda’s Mastering High Net Worth programme.
I am very pleased to be introducing this newly updated edition of the Hubbis’ “Guide to HNW Insurance – a Practical Handbook for Financial Advisors (2022)” (the “Guide”), sponsored by Transamerica Life (Bermuda) Ltd.’s (TLB) Mastering High Net Worth (MHNW) program. This is our third year partnering with Hubbis to produce the Guide, and I’m delighted to be continuing our partnership with them as this resource remains highly relevant and needed today.
As the anxiety around COVID waned in 2021 across the world, buoyant stock market returns and rising real estate values boosted wealth creation. According to a recent Capgemini study, in 2021 the global HNW population and global wealth grew by 7.8% and 8% respectively. North America led the way in growth, with the European and Asia-Pacific regions following in second and third place respectively.
In 2022 however, we see a more mixed and challenging situation unfolding. With many new COVID variants continuing to emerge and the impact of the war in Ukraine reverberating across the world, resurgent economic activity is being replaced by increased economic volatility and geopolitical risks. Exacerbated by the rise in oil, gas, food prices and supply-side challenges from pandemic lockdowns, inflation is running at levels not seen since the early 1980s. In response, central banks around the world are now embarking on a course of rapid tightening in monetary policy. The resulting higher interest rates, as well as continuing geopolitical and macroeconomic uncertainty, have driven equity markets lower, with real estate prices also starting to moderate in some countries following years of rapid appreciation.
However, despite the macroeconomic and geopolitical turmoil, we at TLB, remain very positive about the prospects for HNW life insurance growth in 2022 and beyond. With an ever-changing and unpredictable environment comes the desire for more certainty – and life insurance remains a perfect vehicle to provide that certainty, as well as peace of mind.
Moreover, high net worth individuals (HNWIs) are showing vibrant interest in new financial solutions, presenting new opportunities for innovation in both products and services. According to Capgemini, globally 55% of HNWIs say investing in causes with positive environment, social and political (ESG) impact is a key wealth management objective for them. HNWIs are also seeking greater personalization and convenience in their wealth planning through relevant digital tools and support solutions, continuing the healthy pressure on our industry to digitally evolve.
With this updated Guide, we aim to provide readers an overview of the key dimensions of HNW life insurance and its practical applications. Starting with the needs of HNW customers, it also covers a discussion of the types of life insurance products available and how these can be utilised to meet the different HNWIs’ requirements. We sincerely hope that this easy-to-read Guide will serve as a valuable reference tool for our partners and other financial professionals.
We look forward to collaborating with our valued partners and providing utmost support to them as we work together to “safeguard our customers’ wealth for generations to come."
Transamerica Life (Bermuda) Ltd.
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