Annuities 

When properly structured, annuity policies allow HNW individuals to retain full control of the asset throughout their lifetime, so annuities offer enormous scope as a gradual wealth transfer tool. A range of products and solution structures allow the policy holder to choose when payments might begin and the policy withdrawal timing (if indeed they do want to withdraw) as well as the beneficiaries.

Annuities can be effective as a wealth equalization instrument. And its high manageability also makes it a useful tool for teaching good wealth management practices to the next generation – without risking other family assets.

In some cases, and in certain jurisdictions, an annuity policy and payments can be effectively isolated from debt obligations and potential asset divisions in business/marriage breakdowns.*

Annuities are generally issued with minimum health disclosure and medical underwriting. As such, it’s useful in instances when a client’s health status might be not suitable for whole of life policies.

In most cases, annuity policy holders don’t outlive their annuity income, so it is a relatively low-risk hedge investment – you are hedging longevity risk. Even though annuities are not designed as a hedging tool, some HNW/UHNW individuals invest in annuities in the hope of cashing out in the future at a profit. Others use it to balance other higher risk investments in their asset portfolio.

In volatile times, annuities represent certain income irrespective of circumstances. Appropriately structured annuities can ensure liquidity and cash flow not just for you, but for your future generations.

And when structured with other life insurance products that have lump sum payouts, annuities can safeguard your family’s wealth whatever the future might hold.