High-net-worth individuals are not “lack of money”; what they lack is the protection and arrangement of wealth. For them, the role of insurance lies not in the return on investment it can bring, but in the peace of mind and sense of security that its asset preservation function brings. Li Ka-shing once said: "Others think I am very wealthy. In fact, my greatest wealth is that I bought enough insurance for myself and my family."

When wealth accumulates to a certain level, the owner pays attention The focus is no longer on wealth itself, but on how to gain a stable heart through the arrangement of wealth. This can be demonstrated through the asset preservation function of insurance. Therefore, for high-net-worth individuals, the role of insurance lies not in the investment returns it can bring, but in the peace of mind and sense of security that its asset preservation function brings. Asset preservation can be simply explained as allowing assets to maintain and increase their value. For wealthy people, insurance is first of all a very stable fund reserve and investment method, and it is also a tool that can be easily "liquidated". For business owners, as long as they operate, they will prepare a reserve fund and deposit it in the bank in case of need, they can use it to turn around the business. However, when credit and debt issues arise and legal proceedings occur, the bank's money, including stocks, real estate, etc., may be frozen. When a freeze occurs, business owners may be in trouble, and their business dealings or operations may be shut down or even on the verge of bankruptcy due to lack of cash flow. However, this problem can be easily solved if you have a life insurance policy in advance. Because life insurance contracts take human life and body as the subject of insurance, according to Article 56 of the Insurance Law: “An insurance policy issued in accordance with a contract that requires death as a condition for payment of insurance benefits, without the written consent of the insured, , cannot be transferred or pledged. "So when all properties are frozen or even auctioned, life insurance policies cannot be frozen and auctioned, and its policy loan function makes it the best liquidity tool. For example, if a customer has assets of 5 million, he can put most of the reserve in the bank, and the other small portion (5%-40% of the reserve) can be deposited in an insurance company in one go to purchase whole life insurance. When disputes over claims and debts occur and property is frozen, he can take the life insurance policy and go directly to the insurance company for a loan. For emergency purposes, the loan amount can be about 80% of the cash value of the policy (specifically, according to stipulations in the insurance contract). The timely "liquidation" function of insurance can not only help business owners obtain a sum of cash in time, but also become the best tool for business owners to preserve their assets if the company goes bankrupt. As mentioned above, insurance policies cannot be frozen or auctioned. The insured's receipt of insurance benefits is protected by law and will not be included in the asset settlement procedure. The reason why Kenneth, the boss of Enron Company in the United States, still lived a high-quality life after bankruptcy was because before Enron Company went bankrupt, he and his wife purchased a large sum of life insurance at one time and took advantage of the provisions of American law. He obtained a large amount of funds for preservation. Abroad, many countries levy inheritance taxes, and the amounts are very high. Our country has also begun to discuss and promulgate the "Interim Regulations of the People's Republic of China and the State on Inheritance Tax (Draft)". This means that the collection of inheritance tax has been included in the consideration agenda of improving national laws. According to the draft, the larger the inheritance, the higher the tax rate, which can reach a maximum of 50%. Therefore, personal wealth owned in this life will be "depreciated" due to tax issues when you pass away, or even become a burden and pain to your family. If there is a lot of real estate in the assets and the heirs do not have enough funds to pay the inheritance tax when they receive the inheritance, these assets will not be inherited and may be auctioned in advance. Therefore, for high-net-worth individuals, planning their life wealth as early as possible is a wise choice for themselves and their families. Asset preservation through the tax avoidance function of insurance is undoubtedly a good wealth arrangement. At the same time, the unique way of naming beneficiaries in insurance can also avoid inheritance disputes.

I hope you will adopt it, thank you

Extended reading: How to buy insurance, which one is better, and how to avoid these "pitfalls" of insurance