Extending Cover and Liquidity: We help this client incept greater coverage with minimal cash commitment 

Issue 5, October 2022 | PCS Vision

PCS by Mercer client in his late 60s is at the helm of a billion-dollar family-owned business. He and his siblings share responsibilities and ownership of the family businesses through complex structures. The businesses are generally highly leveraged and illiquid.

Our client has a significant personal portfolio predominately consisting of real estate across several jurisdictions, but he has no significant liquid assets.

He has a number of adult children, and unfortunately, our client is dealing with several underlying health challenges which must be considered in coverage applications.

1. Our client already owns a number of substantial onshore US policies with sizable coverage. The existing policies restricted his new insurance capacity, and the reinsurers were unable to cover him for significant sums in the offshore arena.
2. The client’s ultimate aim was to create reliable sources of ongoing liquidity for his family.
3. The family’s businesses are jointly held with his siblings and would not be easily accessible at short notice.

Our clients are unique individuals, each with singular circumstances, so we found a solution specifically for this client’s needs.

After in-depth consulting and research, we proposed incepting two separate policies with two insurance partners, funding both through a ten-year multi-pay structure.

Both the policies were incepted using our remote process. The client did not need to travel to access the products from different jurisdictions.

In the current rising interest rate environment, the flexibility offered by multiple-pay structured insurance plans can help result in more efficient liquidity management.

PCS by Mercer can leverage the expertise of different underwriting procedures to offer our clients the highest possible cover, using the payment plan that is appropriate to them.