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Variable universal life insurance: in perfect harmony

Are you aware of how powerful and versatile variable universal life insurance can be? When used to complement an asset management strategy, it enhances portfolio management by providing additional liquidity that fosters sustainable wealth management and succession planning, giving clients peace of mind.

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Unit-linked life insurance with the additional benefit of an ultra-high life cover

Your client is a successful entrepreneur and skilled investor. He is in his fifties and has three children. After dedicating most of his life to growing a business, he is now looking forward to harvesting his success. There are plans for his daughter to take over the business, and he wishes to divide his estate equally between all three of his children. Since his wealth is tied up in his company, along with investments in real estate and several investment portfolios, creating an equal split will be a challenge. How can he achieve estate equalisation?

The solution might be an insurance policy that allows him to keep oversight of his investments and provides sufficient liquidity to give each child an equal share of the estate, according to their needs and personal circumstances, while securing the continuity of a family legacy.

Variable universal life insurance combines the longstanding benefits of unit-linked life insurance with the advantages of a high life cover, opening a new field of planning advisory for asset managers: in this way, it gives them the opportunity to become an even more essential source of advice, insight and guidance for clients and their families. The additional liquidity generated can be used for a wide range of client needs that arise in the context of asset management.

What if the investment horizon of a portfolio is shorter than expected, or an investment doesn’t perform according to plan?

Having variable universal life insurance in place enables clients to pursue investment opportunities with much greater freedom. The certainty that, in the event of a portfolio performance not being accomplished due to unforeseen events, there will be a large sum of liquidity available to the beneficiaries, gives clients the freedom to choose investment strategies that are appealing to them without worrying about the future.

How can illiquid assets be handed over smoothly?

Not all investments are liquid. Upon the passing of an investor this can prolong probate proceedings and, thereafter, lead to complex sales procedures. To preserve such investments within a family estate, the proceeds from a variable universal life insurance policy can be used to bridge a potential liquidity shortage. This puts clients and their beneficiaries at ease already during their lifetime, with the certainty that such investments can be kept within the family as long as required.

How to secure the future of a company?

Entrepreneurs need to plan carefully to secure the future of their businesses. The loss of a founder can significantly impact the ability of a founding partner to retain control of the company. Heirs could begin to interfere in the management of the business, or even force the sale of their shares.  Liquidity planning with a variable universal life insurance policy can prevent such a scenario, as it allows the remaining founder to buy out the heirs and continue running the business.

How to leave a legacy for future generations?

Clients wish to achieve investment gains not just for their own wellbeing and for their loved ones, but also to give back to society. Taking out a variable universal life insurance policy generates additional liquidity that can be used to create a philanthropic legacy – all without compromising the family wealth that will be passed on to future generations.

The essence of life insurance is planning for the next generations. With variable universal life insurance complementing an asset management strategy, asset managers can provide sustainable wealth planning solutions that meet special needs of their clients and future generations, as it combines wealth management life insurance with liquidity creation. This insurance product is designed for clients who are sophisticated investors seeking long-term growth of their investment portfolio. It can be adapted to the policyholder’s asset management strategy, whether this prioritises wealth accumulation or wealth preservation, to achieve financial security, independence, and peace of mind.

Key takeaways

  • Asset managers can think of variable universal life insurance as a complement to existing asset management strategies.
  • Variable universal life insurance combines life insurance with liquidity creation, meeting a broad range of clients’ personal and business needs, while offering freedom of choice and financial confidence.
  • Variable universal life insurance broadens the scope of services which asset managers can offer to their clients.

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