What are the key trends in life insurance planning for high net worth individuals (HNWIs)?
The ticket value of a universal life insurance, popularly known as high value life insurance, has jumped by three to four folds from $25 million (Dh91.81 million) a couple of years ago to about $100 million in recent months due to a number of factors. This shows that demand for high value life insurance is growing steadily and the capacity of insurers to pay for such high value is also increasing every year. Clients are now well aware about the necessity for estate planning and liquidity creation.
HNWIs usually invest in insurance for family wealth, succession and legacy planning. What kind of products are gaining traction at the moment?
For HNWI clients, universal life insurance policies have been a popular pathway for securing the future simply because of the structure of the product and the flexibilities they provide in various areas such as projection rates, increase or decrease in premium terms, and even in financing of premiums. Demand for the fully guaranteed product is also gaining traction, as clients are ready to pay more for a guaranteed product rather than products which are market-linked.
How does personal insurance planning fit into a financial plan?
Personal insurance is the easiest and most efficient tool for estate planning, next generation wealth transfer, and charitable commitments. Based on my personal experience, companies and board of directors often take a very long time to decide on insurance but when it comes to business owners, they are spot on and proactive in taking action to safeguard the future of their families as well as ensure continuity of their businesses.
How does insurance work as an investment?
You can create wealth from wealth. Investing in life insurance policies as financial assets has many advantages, especially when viewed primarily for protection and wealth creation.
HNWIs often prioritise acquiring financial assets that provide both protection and potential for growth. While traditional life insurance policies may not offer substantial cash returns comparable to other investment opportunities, they still serve a crucial role in safeguarding assets and generating new financial avenues.
Could you share some details on your background explaining how you got into financial advisory services?
With a background in human resources management and finance, I jumped into the world of insurance in 2012. I found out that there were major gaps in awareness and education about insurance. I also discovered that only large financial institutes offer services to HNWI clients. Independent consultants would seldom approach these clients. While the UAE has created numerous self-made millionaires, building and sustaining wealth is a critical challenge for many of them. I am here to help clients — with complete transparency — create wealth for the long term. I help my clients make informed decisions for their future, based on facts and figures about the insurance products.
What are the key things you consider before recommending an insurance plan to your client?
I have a unique four step process. The right fit meeting is the time when I listen to a client, learn about them and they also get a chance to learn about me. This is a critical step in the process where we both decide whether we fit well for each other and can work together. This is the time when clients share their strengths, biggest fears and opportunities that they are looking at in the next few years — and that’s the starting point for me. Based on their future goals and aspirations, I suggest policies for them. My clients are committed during the four step process and they get the same commitment from me when it comes to transparency, guidance and execution of their financial strategy.
How common is the commitment fee in financial advisory in the UAE ?
I value my time as well as my client’s time and I come on board to add value to my clients’ lives. When you visit the best lawyers, you have to pay for their time and expertise. Similarly, financial advisory is a very responsible profession where an advisor’s ethics and values ultimately contribute to a client’s decision about their financial future as well as the next generation. My commitment fee is for clients who wish to hire my services after the right fit meeting.
To know more about Leena Parwani’s process and book a consultation with her, visit www.leenaparwani.com
