Financial planning is a process which involves setting and meeting your life goals through the appropriate management of your finances. Saving for your retirement is the most common goal for our clients, followed by investing in an education fund. Other goals include purchasing a home or other big-ticket items.
These goals are achieved by wealth creation and growth through investment, a key element of any financial plan. However, there is a second, often neglected, aspect to a sound financial plan: protecting your existing assets and financial resources to secure the future wellbeing of your family by means of sound wealth preservation strategies.
We spend much of our lives building up our assets and accumulating items of value such as cars, homes, savings and investments. However, just because we can afford those things now doesn’t mean that we will always be able to do so. Life can throw us any number of curveballs, from a serious illness to an unexpected redundancy or even a premature death. That’s why protecting wealth is essential. Sadly, millions find out about the importance of wealth protection when it is too late.
Your most valuable asset is not your car or your home; IT IS YOU!
Your ability to earn a living and provide for your family members now and in the future is your most valuable asset. Just imagine if you lost that ability. How long could you and your family survive without a monthly salary before descending into financial chaos?
There are a number of different types of insurance which can guarantee the financial well-being of your loved ones in the face of certain unforeseen life events. These are important because, much as we like to believe that we are in control, we simply cannot predict the twists and turns we will experience in life.
While you can’t shield yourself against all the challenges life might have in store for you, you can take steps to protect yourself and your family from the fallout of unexpected events with a solid wealth protection measures. We outline the most important of these below.
1. Health insurance
- If you or a family member contracts an illness which is costly to treat, you will appreciate the peace of mind of knowing that the bills will be covered by the insurance company, not you.
- Life insurance – under a life insurance policy, the insurer will pay a lump sum to your loved ones if you pass away. This should be sufficient for them to pay off outstanding debts and cover their living costs on an ongoing basis. You can’t protect your family from the hurt of such a loss, but you can protect their lifestyle and maintain their financial stability to soften the impact.
- Critical illness cover – debilitating illnesses and injuries can very swiftly decimate your savings if you are unable to work. Protect against this possibility with critical illness cover, which will pay you a lump sum to cover you while you recover from a list of specific medical conditions, including the big three: stroke, heart attack and cancer.
- A will – this is essential to ensure that your assets are distributed as you wish them to be after your death. Making assumptions regarding what will happen if you don’t have a will is unwise and can lead to disputes among future generations. Leave no room for doubt by having a watertight and professionally drafted will in place. It is recommended that you seek advice from a financial advisor along with tax professionals and an estate planning attorney to ensure you and your family’s wealth won’t be subject to unfavourable tax treatment. A well-structured will may secure a higher education for the next generation, or ensure your spouse receives an income from you investments in the stoc market, among many examples.
- Guardians for your children – If you fail to nominate guardians, then this decision will be left up to a court, and there is no guarantee their choice will be the same as yours. Have your wishes formalised in writing to avoid any issues.
If you feel there are some gaps in your wealth protection, we would be delighted to help you plug them with relevant insurance and estate planning measures. If you are an expat in Asia looking to put measures in place to protect you and your loved ones financially, contact us today.
Benefits of Wealth Management Strategies and Wealth Protection
Asset protection is not just a luxury practice, but wealth protection can save you a lot of money and entail several benefits in the long run. Most people think that financial freedom is not within reach and a proper retirement plan is simply not a priority when their income is already restrictive.
However, managing investment risks and instating an organised structure, including a dedicated inheritance programme, holds many benefits for you, your spouse, and future generations in your family.
Anything could happen in life. Unpredicted events like losing a job or paying thousands on healthcare could substantially disrupt your cash flow situation if you did not invest in comprehensive means to protect your assets. This is where a wealth protection plan saves the day. Protecting your wealth means implementing a wealth management plan that helps families, businesses, and individuals protect their assets, such as property and cash.
An adequate protection plan is essential due to the unpredictable nature of life. However, when you have comprehensive wealth management strategies in place, getting laid off doesn’t have to result in bankruptcy or leave the next generation in debt.
Wealth management for businesses includes insurance products that keep a business afloat during times of significant losses, for example. There are many types of insurance, and the best way to determine the right level of coverage is by weighing up different options and identifying the insurance plan that best suits your specific needs.
Wealth management and protection include a myriad of factors beyond insurance. Other strategies like asset preservation and avoiding unnecessary taxes could greatly assist you to achieve financial freedom and security during and beyond your lifetime.
Wealth protection includes taking charge of your financial planning to ensure you, your spouse, and any future beneficiaries to your assets are protected in the worst of cases. Protecting your personal wealth is, in reality, one of the wisest endeavours you could pursue in your life.
A leading provider of expat financial services and wealth management services across Asia.