Insurance saves many lives, from undergoing financial setbacks. It’s one of the few things that every individual must have. It plays several roles with different perspectives, offering stability. Insurance is more than planning for the worst-case scenario, it’s a financial safety net that helps people quickly get back on their feet.

Do you know? HNIs turn their insurance into a financial gain? Not in terms of security or the payout, but actual monetary gain. It needs a thorough understanding of insurance which an insurance advisory for wealth management can easily help with. Let’s understand the key life insurance policies that an insurance advisory like Avestar Capital suggests.

Life Insurance Policies That Serve As An Asset

There are two categories of life insurance, term insurance and a permanent life insurance policy. The term insurance is set for a particular period, after which it gets nulled and void. Permanent is for a lifetime, so the insurance continues as long as the insurer lives and premiums are paid. It is the key that holds the major potential to bring monetary gains. There are two types of permanent life insurance policies: Whole Life Insurance & Universal Life Insurance.

Whole Life Insurance: The most common type of insurance that provides an additional benefit besides the death benefit. A portion of the accumulated amount gets put into a cash value account, generating a small but fixed return. Think of this as a fixed deposit just with insurance. The returns are guaranteed, “but it’s best to ensure by reading the fine print of your policy to understand better.” Xerxes Soli Mullan, founder of Avestar Capital.

Universal Life Insurance: Universal life policies aren’t much different from the whole. The key difference is that the policyholder’s premium portion which gets invested is subject to change. There’s no guarantee of the returns, think of it like mutual funds (it’s subject to market risks). But with proper insurance advisory for wealth management, one can easily make more in returns.

Here’s How Insurance Advisory Can Help One Grow

Take a loan against the policy. Borrowing against the cash value of permanent life insurance is amongst the best insurance strategies for HNWIs. Their monetary value is high enough to be given a loan against. Avestar Capital helps HNWIs with wealth protection through insurance, to gain better financial stability.

Insurance advisory can help educate on how to use an insurance policy as collateral for a loan. Receive a better rate approved by the bank if the loan payout is worth a certain amount or more. In this instance the life insurance is essentially serving as an asset, helping get a loan pass through.

The role of life insurance in estate planning for HNWIs is impeccable for transferring to future generations without any taxation. The liquidity provided by insurance payback can be used to pay estate taxes, minimizing the heavy tax imposed. Insurance companies allow the insurer to designate children, grandchildren or other members as beneficiaries, answering how to use insurance for generational wealth transfer. But these are just the “Hows” of insurance advisory, now let’s understand the “Whys”

Why Insurance Advisory Is Necessary For HNWIs

The main advantage of having an insurance advisor is their expertise. Insurance policies are complex and can be more demanding via various terms, conditions, and exclusions. “Dealing with insurance claims is time-consuming. They become your advocates during claims settlement, providing valuable help and support.” Shilpa Konduri, President of Avestar Capital.

Insurance advisors like Avestar Capital provide personalized advice tailored to your specific needs. They take time to understand your financial goals, lifestyle, and risk tolerance before recommending insurance options. Unlike online platforms or direct insurers, insurance advisors provide human support with a personal approach.

Avestar Capital offers insurance advisory for planning, analysis, and risk evaluation. It includes advice and recommendations on life, health, property, disability, and casualty insurance coverages.