Hong Kong tycoon Li Ka-shing said: "Others say I am very rich and have a lot of wealth. In fact, the real wealth that belongs to me is buying enough insurance for myself and my relatives." Many people wonder why. Do rich people like Li Ka-shing also need to buy insurance? Isn't his wealth enough to withstand risks? First of all, rich people know better than poor people that money needs to be invested and they must pursue return on investment. If you have money, you will never keep your money in your hands (that is, hold cash) or put it all in the bank (due to low interest rates on deposits). You should use most of your money in other investments: such as stocks, companies, bonds, etc. But when you or your family are at risk, it can be hard to find the money. Therefore, in order to have sufficient financial protection in the event of an accident, you should allocate part of your wealth to life insurance. This will relieve your worries about investment. This is what is often called the rule of three: banks, stocks, and insurance, the three major directions of home investment. Insurance is also a good way to avoid taxes. You can take out a large life insurance policy on yourself during your lifetime so that part of your wealth can be inherited by your children tax-free. Is it your wish to be rich for three generations, run a sustainable business, and avoid inheritance tax? Buying insurance is, of course, for protection, such as pension, medical care and accidental injury. However, according to insurance experts, people with different incomes focus on different purposes. Low-income people buy insurance, middle-income people buy it for financial management, and high-income people buy it more for asset preservation. In fact, rich people have many reasons to buy insurance. First, the strength is reflected. The largest personal insurance policy in Xiamen required for business is an annual premium of 5 million yuan, which is the fourth largest insurance policy in the country. Insurance professionals analyze that huge insurance policies are often for personal protection purposes, such as business needs. There is a company with an annual turnover of more than 900 million. A new overseas customer asked for a credit certificate. The customer said that the boss's personal life insurance policy is a kind of credit, but the usual threshold is "a insured amount of US$10 million, and the annual premium is more than US$200,000." In order to meet the requirements of customers, the boss took out a million-level insurance policy. Large insurance policies are a symbol of dignity, status and wealth. According to professionals, insurance companies are very strict in reviewing large insurance policies with premiums of more than 200,000 yuan. In addition to worrying about insurance fraud, insurance companies usually require customers to apply for insurance within their means. For example, the annual premium is 10%-20% of the annual income, and the insurance amount is 5 times the annual income. Therefore, if the huge insurance policy you hold comes from a responsible insurance company, it is undoubtedly a trustworthy business card, symbolizing your worth and status. Second, preserve assets and resist favor debts. Taiwan’s richest man, Tsai Wanlin, only paid NT$600 million in inheritance tax after his death. The main contributor to tax savings was his insurance policy. He bought 6.2 billion in insurance alone. Since the insurance is tax-free, Cai Wanlin's property can be "safely" passed on to his heirs. There is no inheritance tax in mainland China, but there are many people who plan for a rainy day. Some wealthy people buy insurance to designate beneficiaries. Arrange property inheritance in advance. More realistically, insurance is used as a shield against favors. There was a businessman in Jinjiang who was troubled by his friends asking him to borrow money every day. Nine times out of ten, the money he borrowed would never be returned. Borrowing will offend others, and not borrowing will offend others. One day, I was enlightened by an insurance officer and spent the remaining money to buy insurance. Now, someone came to borrow money, and the old man said plausibly: "I'm sorry, why didn't you come earlier. I bought insurance for my money, and insurance requires withdrawal in advance. If you don't believe me, go to the insurance company and consult." In the past, a large chunk of the money earned from doing business had to be withdrawn and given to others as a "bad debt provision." Now the safety of the money is guaranteed, and if it needs to be turned around, you can also borrow money from insurance companies using insurance policies. This businessman said I am very proud of my decision. Third, absorb culture and train the next generation of modern entrepreneurs to become increasingly aware of risk aversion. The above two alternative reasons are ultimately related to risk awareness and involve direct economic interests. However, there are also people who get involved with insurance in order to learn management or to train the next generation. The boss of a big entrepreneur bought insurance and realized that the competitive environment in insurance companies was fierce, which was of great benefit to his daughter's training and growth. Moreover, he appreciates the company's culture and management mechanism very much. He requires his daughter to integrate into the group and understand the company's management methods thoroughly. There are also small business owners who secretly learned the incentive mechanism of insurance companies through daily contacts and applied it to their own companies. As a result, they not only retained skilled employees, but also attracted technical employees from surrounding companies, making it easy for them to compete in the "recruitment war". After winning, the scale of the company expanded and it got on the outsourcing ship of well-known brands.

Extended reading: How to buy insurance, which one is better, and step-by-step instructions to avoid these "pitfalls" of insurance