Protecting your children throughout their lifetimes 

Issue 1, February 2024 I PCS Vision

What really matters to you? If you are a parent, then the likely answer is your children. But how do you ensure they are looked after even after you are gone? We help this family find the right life-time protection for their sons, including a special-needs child.

PCS by Mercer client is a healthy female in her early 60s, who has recently retired.  She is married with two adult sons, who are in their early 40s. 

Her younger son was born with special needs and requires ongoing financial support from the parents. The other son lives overseas and has a successful career.

Despite having a comfortable lifestyle and successful investments, our client is focused on safeguarding the financial futures of her sons. 

She is concerned about her younger son’s ongoing living expenses after she and her husband pass away. She is also worried about the potential financial and emotional impact on her older son should the younger son have unforeseen financial needs in the future. 

As a financially astute individual, our client understands that while investments may generate stronger returns, those returns are non-guaranteed and subject to fluctuations. She also sees the importance of financial planning. 

She wanted PCS by Mercer to assist her in: 

1. Liquidity planning: to maintain the family’s lifestyle and free up capital for potential investments.
2. Creating future financial certainty for her sons.

After some detailed discussions about her financial position as well as her hope and fears, we presented two potential solutions to our client: a Whole of Life plan and a Universal Life plan. The benefits from both types of plans can be placed into a trust structure for future distribution.   

Client also elected premium financing because having a protection plan with a leverage factor in place would free up their savings for other financial needs.

Solution: Our client chose a Universal Life policy with her younger son named as the beneficiary of an associated trust. 

Premium: USD1.2M. 

Total sum assured: USD3M death benefit.

“Plan Bs” exist to mitigate life’s uncertainties and reduce the impact of downsides. When it comes to life insurance – which can have significant upsides on your family’s wellbeing – it is generally more cost-effective to have your plans in place at the earliest possible moment. 

Incepting policies earlier in life not only gives you longer-term peace of mind, but it also minimizes the “age loading” on your premiums (premiums increase by an average of 3-5% for every year with increasing incepting age. This increase is in additional to other factors such as inflation or etc.).

PCS by Mercer consultants will always present our clients with different solutions. We will also work with you to find and select the solution that is the most suitable for this precise moment in your life.

*This case study is based on a real-life family. Some details have been changed to preserve privacy.