How insurance aids legacy planning for high net-worth families

As fortunes grow more complex, insurance is emerging as a key tool to pass wealth.

Asia’s wealth transfer is here, with an estimated US$5.8 trillion set to pass from one generation to the next by 2030. As this shift unfolds, insurance is emerging as a vital component for high-net-worth families looking to preserve and pass on their wealth.

Harpreet Bindra, CEO of HSBC Life Singapore, emphasises that insurance offers both predictability and simplicity in a complex global landscape.

“Insurance offers wealth preservation, capital appreciation, and seamless wealth transfer, which are key to legacy planning in Asia,” he said. Bindra highlights that one in two new high-net-worth individuals in the coming years will come from Asia, making insurance a crucial financial tool for wealth growth and security.

Alongside this growth, an unprecedented wave of intergenerational wealth transfer is underway, with families seeking to transfer assets smoothly to the next generation.

He mentioned that insurance is complementing traditional estate planning tools like trusts, especially when assets are illiquid, such as property or businesses. “Trusts provide the structure and governance, but insurance injects liquidity, allowing wealth to be transferred equitably without liquidating illiquid assets,” Bindra explained.

The next generation of high-net-worth individuals is also approaching legacy planning with a focus on values. “This generation is not just looking at wealth preservation, but they are looking at how wealth can be used as a force for good,” Bindra said. Many are aligning their financial legacy with personal values, including sustainable investments and philanthropy.