How do Jack Ma and Li Ka-shing use Hong Kong insurance to realize wealth inheritance?

What is the mission of insurance?

It's all about giving people security! I think if security could be bought in this world, anyone would want it. --Ma Yun

In the wealth transfer toolbox, businessbe bound toIt is an important part, but most people's impression of insurance is still stuck in the stage of "insurance", not knowing that insurance is not only a good insurance, but also an important part of the company's business, and it is also an important part of the company's business.risk protectionIn addition to basic functions such asWealth inheritanceThe function of the

Actually.The advantages of insurance in the transmission of wealth are very clear.Especially for high net worth individuals, insurance can play a larger force in wealth transfer.

According to the Hurun Research Institute's 2022 Family Legacy Report for China's High Net Worth Population, it was found that insurance is the first choice for most of China's HNWIs to pass on their wealth.

A White Paper on Wealth Risk Management for High Net Worth Individuals 2022 states that in addition to liquid financial products:

• 88%'s HNWI households are widely allocated to safety products such as life insurance and commercial pension insurance, as well as high-return investment products such as stocks and gold;

• 70%'s high net worth families allocate to protection products such as critical illness and accident insurance;

• 45% of HNWI households have money invested in special type products such as jewelry, antiques, art, wine, and so on.

It can be seen thatInsurance has become the first choice of high net worth people for wealth inheritance.

01

High Net Worth Individuals Make Good Use of Insurance to Pass on Assets

Hong Kong's richest man Li Ka-shing holds insurance in high esteem, after Richard Li was blessed with three sons, Li Ka-shing insured each of his grandchildren for HK$100 million. This is not that Li Ka-shing is showing off his wealth, but his recognition of the role of insurance in the transmission of wealth.

Li Ka-shing once said, "People say that I am very rich and have a lot of wealth, but in fact the wealth that really belongs to me personally is adequate life insurance for myself and my loved ones."

Among the Mainland tycoonsJack Ma also loves to buy insurance for ten minutes.

Public information shows that Jack Ma's personal life insurance coverage amounted to 40 million. While buying insurance himself, Ma also invested in four insurance companies, one of which he owns as much as 60%, which shows Ma's favor for the insurance industry.

In addition, once a company goes bankrupt, whether it is stocks, bonds or funds, they are used to cover the debt, whereas insurance is not.

Enron, once a Fortune 500 U.S. corporation, collapsed, and the former president, Kenneth Lay, had invested millions of dollars in various annuity insurance policies as early as two years ago, so that even if the company went bankrupt, the Kenneth Lays were able to enjoy $900,000 a year in annuity benefits.

02

Insurance is the best tool for preserving and passing on wealth

With China's wealthy increasingly appearing on wealth lists, large policies with annual contributions of over a million dollars are commonplace in the putative insurance world.

Are high net worth individuals willing to spend a lot of money on insurance just to protect themselves?

Not quite, there are also advantages to purchasing insurance for high net worth individuals as follows:

1. Reasonable tax savings

Overseas, HNWIs will purchase high levels of life insurance to avoid interest income tax and inheritance tax due to large amounts of money and property being stranded.

Also, the unique way that insurance designates beneficiaries can effectively avoid estate disputes.

For high net worth individuals, planning for life's wealth as early as possible is a wise choice for themselves and their families.

2. Avoiding investment risks and easy to realize

By purchasing high value policies, high net worth individuals are able to take some of their money off the business operation risk and not be left with nothing if their investment fails.

And when assets are frozen or subject to compulsory sale, the policy loan function can be the best liquidation tool to solve financial difficulties at the critical moment.

3. Exclusion of charges on assets

When all property is frozen or even auctioned off, the only thing that cannot be frozen or auctioned off is a life insurance policy.

The insured's receipt of benefits is protected by law and is not counted in the asset set-off procedure.

4. Wealth inheritance

By purchasing an insurance policy, the assets can be paid to the next generation in the form of annuities over a period of years, from early childhood to old age. This kills three birds with one stone: you don't have to worry about your assets being squandered in a short period of time, and you ensure that the next generation will be able to live independently and have a certain quality of life.

The most important characteristic of wealth transmission is certainty.To determine the security of wealth, to determine the appreciation of wealth, to determine the application of wealth, to determine the distribution of wealth, to determine the protection of wealth from marriages and disputes, it is the function of insurance to turn these determinations into certainties.

HNWIs generally believe that by purchasing insurance on a long-term basis, they can protect their wealth and cope with various emergencies in the future, such as medical care, retirement, children's education, intergenerational wealth inheritance and other financial needs.As the financial instrument most directly linked to "protection", insurance is favored by high net worth individuals.