The study, so its authors say, underscores the importance high net worth individuals in the region attach to using life insurance, for example, as a way of managing wealth in a variety of ways.

Insurance plays a big part in the way HNW individuals in Greater China guard their wealth and plan finances, according to a report from Manulife Hong Kong and Deloitte.

More than two-thirds (70 per cent) of respondents to a survey by the authors of the report have integrated insurance into their asset portfolios, with 30 per cent allocating 11 per cent. The study focuses on HNW individuals with net assets of at least HK$7.8 million ($1.0 million) in the Greater China region. The report was developed based on proprietary research and interviews with relevant stakeholders including HNW individuals, as well as an analysis of qualitative and quantitative data.

Almost 78 per cent of respondents have life insurance; medical insurance (76 per cent) and savings insurance (60 per cent) following close behind. The report found that 57 per cent of respondents express a desire to leverage insurance to facilitate a smoother transfer of wealth to future generations. 

While it is perhaps unsurprising that a firm (Manulife) that is a major insurance provider has a report stating how important insurance is, the study does nevertheless underscore how this area is important in the Asia-Pacific wealth market.

The use of life insurance as a wealth management tool is a topic this publication has explored before. In the UK, to take a different case, life insurance is, so advisors tell this news service, under-used as a tool to handle costs such as settling inheritance tax bills.

When asked to rank the most important outcomes they hoped to achieve in asset inheritance, 64 per cent of those who picked “prioritising the distribution of their assets in their desired manner to prevent inheritance disputes” identified it as their main anticipated outcome. Among all respondents, 67 per cent acknowledge that designating beneficiaries through insurance can help mitigate conflicts in the eventual distribution of their wealth.  

“Insurance has evolved from a risk management product to a legacy planning tool highly preferred by our HNWI clients,” Anthony Lau, Deloitte Private Hong Kong leader, said. “It mimics some key features of will, family trust, and limited power of attorney, making insurance one of the most accessible legacy planning components. Moreover, in certain jurisdictions, tax authorities offer preferential tax treatment such as tax exemption, deferral and deductions for insurance products, as outlined in their tax law.”