Insurance as Part of Estate Planning Strategy

Creating a lasting legacy and ensuring the smooth transfer of wealth to the next generation of the family is a goal many aspire to achieve. But it’s easier said than done. As the torch is passed at many of the country’s biggest family conglomerates, individual clients are also becoming more interested in tools to make estate planning easier, more transparent and forward-looking.

At FWD, our commitment to customer excellence drives us to continually refine our insurance offerings to better anticipate the needs of Filipinos, at every life stage or financial segment. This includes catering to the upcoming generation of Philippine wealth – individuals and families who can benefit from bespoke insurance options. For these clients, we’ve introduced FWD Prominence, a suite of insurance solutions designed for wealth management and estate planning. Our aim is to make wealth preservation, succession and growth more accessible and manageable for everyone.

In partnership with Security Bank, FWD invited select clients for Savvy Talks: Wealth Succession, an afternoon with estate planning experts. We gathered at Las Casas Quezon City, where heritage houses stand as elegant reminders of the need to plan our legacies before we go.

Financial advisers and attendees alike were eager to hear from expert speaker Atty. Malou Lim, Vice Chair and Tax Managing Partner of Price Waterhouse Coopers (PwC) Philippines; from FWD’s Senior Director, Head of Communications and Product Marketing, Sonia Ching-Pascual, and Binky Mirabueno, Sr. VP and Wealth Management head of Security Bank. Host Samantha Purvor kept the ball rolling.

Estate planning and legacy planning

As Atty Lim explained, estate planning is the process a family goes through to efficiently transfer assets from one generation to the next. The goal is to make the transfer as smooth as possible, keep taxes low, avoid family disputes, and keep both the resources and relationships intact.

Depending on a family’s needs, methods can vary. They might sell assets, donate them, or even set up a family trust. But there are rules to follow and taxes to pay, and these can change depending on who’s involved - parents, spouses, or other heirs. This is all against the backdrop of the country’s ever-changing tax and inheritance laws.

“Estate planning” is often confused with “legacy planning.” As Atty. Lim clarified, estate planning is practical, focused on legal documents such as wills, contracts, beneficiaries and taxes. Legacy planning focuses on the values a parent wants to leave to their children, often in terms of lasting impact on the larger community. It often involves charities, foundations and family history, set up to be sustainable over generations.

There’s one more factor to consider, which is particularly true in family-oriented Asian societies. Atty. Lim cited studies marking a common stumbling block in estate planning which, surprisingly, is poor communication. It’s not just about the tangible assets like real estate, funds, or who’s going to take over the family business. It’s the intangible factors - emotions, unresolved family issues, resentments, and individual life goals that can muddy the waters. By starting their conversations early on, families can address their issues and plan their strategy together – including using insurance to conserve and preserve their assets.

Insurance’s role in estate planning

Following a lively Q&A with Atty. Malou, FWD’s Sonia Ching-Pascual shared how families can use insurance in estate planning.

When planned well, insurance can serve a variety of purposes: reduce tax, keep business continuity, safeguard the nest egg, and many more. It’s a customizable way to preserve resources and spread them equally among family members. Some families have used insurance for generations to grow, manage and preserve their estate.

One reason this works is the rise of investment-linked insurance - policies that can build wealth, by investing it in funds diversified to fit the policy owner’s goals and risk tolerance. In this aspect, FWD and Security Bank work with highly qualified fund managers to provide clients a range of investment choices for the short- and long-term.

As conversation shifted to the investment outlook, Security Bank’s wealth management head Binky Mirabueno shared insights on clients who, post-pandemic, realized the importance of insurance and its role as part of a wholistic wealth management plan.

Savvy Talks: Wealth Succession was a refreshing, quite candid discussion, a chance for clients to have a quick face-to-face with experts about their family situations, and for FWD’s Financial Advisors to bring a higher level of solutions to clients. Definitely a conversation worth having at 1Ox years and onward.

Savvy Talks: Wealth Succession will be coming to Makati and the south in the future. If this interests you, please contact your FWD Financial Advisor for details.

Be guided about the many ways on how to transfer wealth and plan your legacy for your loved ones.