Banks & Insurance Firm have been pushing for their high net worth clientele to enroll in their Universal Life Policy.
How the policy works:
A 65 year old Business man, Mr X, has a total net worth of $5 Million Dollars. Assuming that he would like to leave behind $5 Million dollars in inheritance, he is technically not allowed to spend anymore. With Universal Life, Mr X commits an amount of $2 Million with the policy, he would leave behind a sum of $5 Million upon his death (excluding the initial $3 Million). This way, Mr X gets to spent his his $3 Million and still leave behind a $5 Million estate after his death.
With use of other instruments, it is possible to create a family fund to provide perpetual wealth for future generations.
It is always good to leave behind more assets for your descendants, but do it in a way that will not ruin their lives.
“What do you think will happen to the lives of a Teenager or University Student, who inherits a sum of $2,000,000?”
A Widow, who’s husband passed away in a freak accident in Changi Airport, lost the entire compensation sum amounting to more then $1 Million within a year.
While it is noble to leave more resources for the next generation, it is more important for you to pass down the right values to them.
Are they a good representative of your values?
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