rrc-blog-post-041414

This is sponsored content submitted by Sun Life Financial.

The desire to protect ourselves and our loved ones runs deep. As early as 4000 BC, marine contracts protected Babylonian merchants from losses related to the transport of goods. In ancient Rome, members of burial groups paid dues to cover their funeral costs and financially support their survivors.1 Today, we have life insurance to protect our financial well-being and maintain our quality of life during difficult times or significant loss.

For the average Canadian, life insurance is an essential part of a holistic financial plan. The same (and more) goes for high-net-worth clients, yet you’ve likely met resistance because of a long-time assumption: the wealthy don’t need insurance.

A common belief among affluent Canadians (many of whom established their wealth through a successful business, are mortgage-free, have millions in assets and are nearing retirement) is that they can easily self-insure against life’s challenges. Insurance isn’t relevant to them—so why even discuss it with an advisor?

This prompted us to compile some of our insights in a bright paper entitled “Life insurance for the wealthy: the myth-busting benefits,” which focuses on insurance for the affluent.

As more and more affluent boomers approach retirement, the time is right to open a dialogue on how your high-net-worth clients can benefit from insurance. Income protection is just the start. Insurance gives them an excellent opportunity to grow their assets, strengthen their business, enhance their retirement income, diversify their portfolio and maximize their legacy. By looking at a traditional product solution in a new light, we aim to help you start conversations, foster a more holistic approach and expand your block of business in a significant market segment.

Life insurance for the wealthy: the myth-busting benefits – highlights

The full bright paper covers key points, including:

  • The need for money doesn’t decrease with wealth; it increases. Higher-end lifestyles bring things such as multiple properties, expensive hobbies and high-end travel that require an ongoing cash flow.
  • The higher your pre-retirement income, the greater percentage of income replacement you’ll need to maintain your lifestyle in retirement.
  • Life insurance helps protect the value of high-net-worth clients’ income earning potential. Perhaps more important for the affluent, it can grow and protect the assets they already own and make up their net worth, including real estate holdings and business investments.
  • As wealth grows, the need for estate, business and lifestyle planning increases. Life insurance can play a valuable part of these plans. It can:
    • Act as an alternative asset class, producing superior rates of return compared to investments such as GICs or government bonds.
    • Offer tax-effective ways to transfer wealth to grandkids or within a corporation.
    • Provide additional tax-free retirement income.
    • Facilitate charitable giving.
    • Cover estate tax liabilities.
  • For businesses with multiple owners, insurance is key to funding a buy-sell agreement, setting out the conditions (death, disability) that give owners the right to buy the ownership shares of other owners. And through key-person life, disability and critical illness insurance, if an owner or essential employee becomes ill, disabled or dies, the business receives funding to maintain operations.

A tried and true solution with new opportunities

Affluent clients’ needs may be different than those of the average Canadian, but their need for protection is the same. So is their desire to make the most of what they have and retire with confidence. We believe that a holistic planning approach—including insurance—will address these needs and then some. And we hope they’ll hear about it from you. Insurance is a tried and true solution that presents excellent opportunities for high-net-worth clients—and advisors who start the conversation about insurance as an asset class within a retirement portfolio.

1 www.britannica.com/EBchecked/topic/289537/insurance/13268/Historical-development-of-insurance

Rocco Taglioni, Senior Vice-President, Head of Distribution, Individual Insurance and Wealth, is responsible for the overall leadership of Sun Life Financial’s distribution organizations across its Retail business in Canada. His role encompasses the leadership of the distribution company, as President Sun Life Financial Distributors Inc., as well as the Insurance and Wealth wholesaling sales organizations. Through the various leadership teams he oversees the development, direction, and execution of the Distribution strategies centered on wealth management, protection, retirement, and estate and financial planning.

Since joining Sun Life in 2004, Rocco has held various executive leadership roles, including Vice-President Business Development, Group Benefits; Head of Individual Wealth Management; Senior-Vice-President, Client Solutions; and most recently Senior Vice-President, Distribution and Marketing, Individual Insurance and Wealth. Throughout his tenure at Sun Life, Rocco has led various business strategies centered on building, transforming, and evolving organizations and teams to drive higher levels of performance and success.

Rocco has 36 years of experience in strategic leadership in the insurance and investment industries. He has served on and is a member of a number of boards. Rocco is currently President and Chair, Sun Life Financial Distributors (Canada) Inc. and is a member of the Sun Life Financial Investment Services (Canada) Inc. board. He is a member of various industry associations, including Advocis, GAMA Canada, the Canadian Pension and Benefits Institute, and the Association of Canadian Pension Management.

Rocco holds a Bachelor of Arts in Economics from York University.
Originally published on Advisor.ca