A new report has highlighted key findings regarding the financial planning preferences of high-net-worth individuals (HNWI) in the Greater China region, released by Manulife Hong Kong and Deloitte.
The study indicates that 70% of participants have incorporated insurance into their asset portfolios, with 30% dedicating 11% or more of their assets to insurance products.
This emphasizes the significant role that insurance solutions play in the financial strategies of HNWIs.
Focusing on HNWIs with net assets of at least HKD7.8m ($1.01m), the report provides valuable insights into how this demographic utilises insurance as a tool for wealth planning.
It addresses the specific challenges faced by this group and illustrates how insurance can effectively assist HNWIs in achieving their goals related to wealth preservation, accumulation, and distribution.
The report reveals that life insurance is the most prevalent type of coverage among HNWIs, with nearly 78% of respondents holding a life insurance policy.
Medical insurance follows closely at 76%, while savings insurance is owned by 60% of participants. Importantly, 57% of respondents express a desire to use insurance to ensure a smoother transfer of wealth to future generations.
When asked to rank their primary goals for asset inheritance, 64% of those who chose "prioritising the distribution of their assets in their desired manner to prevent inheritance disputes" identified it as their top objective.
Additionally, 67% of all respondents recognize that designating beneficiaries through insurance can help reduce conflicts regarding the eventual distribution of their wealth.
Other significant findings from the report include:
- Concerns about legacy submission- Among the respondents who identified certain issues as part of their top five concerns, the following percentages represent those who ranked them as their foremost worry:
- Disputes among heirs: 52% fear that the distribution of wealth could lead to family conflicts.
- Heirs' ability to manage wealth: 43% express concerns about potential challenges, such as inadequate financial planning, lack of investment knowledge, excessive spending, and immature decision-making.
- Risk of wealth loss or depreciation: 43% worry about the possible loss or depreciation of wealth during the succession process.
- Retirement priorities
- Quality of life: 86% emphasize the importance of maintaining a good quality of life and managing associated expenses.
- Living environment: 69% consider their living conditions significant, including housing options and the possibility of relocating abroad.
- Access to high-end medical protection: 65% prioritize having access to premium medical care.
The report jointly published by Manulife and Deloitte was developed based on proprietary research and interviews with relevant stakeholders including HNWIs, as well as an analysis of qualitative and quantitative data. Customer research was conducted in Greater China.