Building intergenerational wealth
Published on Wed May 20 2020 in Money
We all want to help protect our families. For many people, the desire to care for the ones they love is something they hope to do for as long as possible. Sometimes, this includes providing support even after they’ve passed away. This may mean leaving behind some sort of financial assistance, both to help their family in the short term as well as into the future.
However, there are more ways to help protect your family’s financial future and set them up for success than just saving money in the hopes that it will be there when you’re gone. Life insurance could be an affordable option to help those you love build their lives for years to come.
Building intergenerational wealth
You may already be familiar with the idea of leaving behind some sort of inheritance at the time of your death. This is the foundation behind building “intergenerational wealth”. Passing along money to the next generation could help set your children on the right path or even give your grandchildren a head start in life.
While people tend to think of this in terms of money in the bank or through KiwiSaver, that’s just two ways how families can build intergenerational wealth. This could also be done by passing on your home (if owned), other property, or a small business. These types of assets (the valuables you leave behind when you die) are also ones that people commonly think about when writing a legal Will or otherwise planning for the future.
Why is building intergenerational wealth important?
Helping your family build wealth over each generation could provide them with a brighter future and help them access more opportunities e.g. training courses or ability to buy new machinery. It could also help you create a lasting legacy that will be remembered for years to come.
Life insurance can play a key part in this. As we’ve already mentioned, the benefit amount your family may receive could help shield them from large debts and help them keep important assets that could be worth more as the years go by. That way, they’re there when your family may profit the most on their value.
A family business could help create ongoing financial support for years to come. It could also provide your children or grandchildren with important work experience, setting them up with valuable skills for their careers or to eventually take over the business themselves. Similarly, helping your children or grandchildren get the best education possible could provide them with better opportunities for gaining high-paying, steady work throughout their lives.
About Author: Momentum Life is a leading provider of Life insurance and Funeral insurance in New Zealand.
1. 1 News, Most Kiwis don’t have enough savings to weather economic downturn, survey finds, 21 March 2020
2. Financial Services Council, Gambling on Life: The Problem of Underinsurance, January 2020
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