Insurance as Core Component in High Net Worth Wealth Planning - Insights from 2025 Hubbis Forum

At the 2025 Hubbis Wealth Planning & Structuring Forum in Dubai, industry experts highlighted the expanding role of insurance in high net worth (HNW) wealth planning. Insurance is increasingly integral, serving as the cohesive element linking estate and succession planning strategies, alongside trusts and foundations. It offers essential functions such as personal cover, keyman protection, and liquidity planning, vital for family wealth continuity during transitions.

Life insurance is now recognized as a distinct asset class within investment portfolios. Its attributes include guaranteed liquidity, tax efficiency, and low volatility, contrasting with higher-risk assets like private equity. This positions life insurance as a core component for asset allocation and estate planning rather than a supplementary product.

The panel discussed insurance’s role in mitigating legal risks amid increasing cross-border wealth complexities. Families with global assets face challenges from diverse tax laws and inheritance rules. Insurance provides protections against risks such as divorce, disputes, and financial duress, supporting liquidity and safeguarding access to wealth within governance structures.

Annuities and savings plans have evolved into significant wealth structuring tools. Annuities, formerly underused in regions like the Middle East, now gain recognition for their dual function as fixed-income investments and insurance solutions. These products can be integrated within broader insurance strategies such as Variable Universal Life (VUL) policies and Private Placement Life Insurance (PPLI), aligning income stability with estate objectives.

PPLI is emphasized as a sophisticated instrument enabling the embedding of diverse assets into an insurance wrapper. It provides asset protection, confidentiality, and tax optimization, accommodating global mobility and cross-border tax challenges for ultra-high net worth families.

The integration of insurance within trusts and foundations enhances governance, longevity, and flexibility. Insurance proceeds can fund business continuity, cover inheritance taxes, and ensure liquidity distribution predictably, often utilizing strategies to maintain liquidity perpetually across generations.

Despite advancements in product offerings, behavioral challenges limit adoption. Many families defer succession planning, unaware of risks such as forced heirship, liquidity shortfalls, and tax inefficiencies. Effective education and real-world case studies are essential for overcoming reluctance.

The discussion acknowledged the necessity of embedding insurance in governance frameworks to address cross-jurisdictional conflicts and geopolitical risks. Without such integration, traditional structures like trusts may falter under legal or financial pressures.

Looking ahead, the panel underscored insurance’s transition from ancillary role to foundational element in wealth planning. Its unique capabilities in delivering certainty and resilience make it central to addressing diverse client needs from lifestyle funding to dynastic planning.

Advisors are encouraged to present insurance as an essential part of asset allocation and succession governance. Normalizing insurance in estate discussions fosters the building of durable legacies that balance liquidity with preservation, ensuring continuity across generations.