Private Client Services by Mercer
70% of millennials expect to keep working later in life to maintain their desired quality of life, while 2/3 of adults expect to live past 80, but only 1 in 3 expect to have enough money to afford it*. Longer life spans make for longer retirements. The average life expectancy for a 65-year-old male is an additional 19 years and an additional 22 years for a female of the same age, with a 25% chance of one person reaching age 97; and about a 5% chance of them living to age 100^.
Given today's market volatility and changed retirement landscape, having an insurance in place can help your clients address liquidity and protection needs, ensuring flexibility and the ability to cushion the impact of market volatility, while meeting their long-term goals and providing peace of mind.
Do you have clients who may have retirement savings reduced significantly as a result of the market turmoil; are averse to life insurance; have been declined or received unfavourable offers by insurers in the past due to their medical examination results; or are too old to go for medical examination but wish to leave something behind for their grandchildren?
As an alternative asset class, Savings Plan is another insurance tool which can help your clients fulfill various key milestones and life’s goals including wealth accumulation, legacy planning, asset protection and retirement planning.
Source:
* https://www.mercer.com.sg/our-thinking/healthy-wealthy-and-work-wise.html
^ https://www.cnbc.com/2020/03/27/op-ed-with-market-volatility-4-percent-rule-creates-risk-for-retirees.html (best viewed on Chrome)
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Annuities Provides life-long annuity income for clients |
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Dividend / Bonus Accumulates non-guaranteed dividend or bonus based on returns of the participating fund(s) of the insurers |
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Guaranteed Cash Coupon Distributes guaranteed cash coupon to clients on a regular basis |
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Universal Savings Accumulates cash value with crediting interest rates |
Note: Some plans may combine different components of the above.
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Flexible withdrawal options to provide cash flow in different life stages |
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Attractive long term potential returns with accumulation of cash value, dividends and bonus |
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A guarantee of at least 100% of premium paid in certain years, giving clients peace of mind |
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No medical examination is required for most of the plans |
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Some plans have change of insured features for transferring wealth to future generations |
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With death benefit settlement option (where applicable), clients can choose to distribute legacy by installments for up to 30 years |
How Savings Plan can Fulfill Different Needs for Key Milestones
As a case-in-point, Savings Plan has helped one of our high net worth clients, a male aged 30 years, allocate his wealth and protect his family’s future. With the arrival of a newborn to his family, the client was looking to set aside funds for his child’s future education and needs, without his investments being too largely impacted by market volatility.
A Savings Plan with a premium of US$200,000 per year across 5 years was proposed, with a potential total payout of over US$121 Million based on the following:
Example based on a HK domicile Insurance Savings Product
Africa
