Wealth appreciation is a crucial aspect that everyone must address, involving effective management and utilisation of financial resources to achieve personal or family economic objectives. However, during the planning process, many individuals often encounter various pitfalls, hindering the progress of wealth appreciation. This article will delve into some common traps related to wealth growth and analyse how savings insurance, serving as a reliable financial management tool, can effectively mitigate risks and boost wealth accumulation.
Financial management pitfall 1: Believing that buying more Equals diversifying investments
While diversification is beneficial, many investors tend to concentrate on acquiring the same types of assets, such as stocks and funds, failing to achieve genuine risk diversification. Hence, when crafting a financial plan, careful consideration of investment objectives, risk tolerance, and prevailing market conditions is essential, selecting appropriate asset types and quantities to achieve effective risk management.
Financial management pitfall 2: Focusing solely on short-term performance and neglecting long-term value
Numerous individuals prioritise short-term profits at the expense of critical future goals, such as retirement or children's education. A prudent asset allocation should prioritise long-term stable investments to safeguard family assets and achieve sustained wealth appreciation, ensuring funds meet future needs.
Financial management pitfall 3: Lack of emergency reserve
Emergency reserves furnish financial assistance during unexpected events or emergencies. However, many overlook the significance of emergency reserves in financial planning, failing to adequately prepare for potential crises. Consequently, when planning capital allocation, asset allocation ratios should be tailored to individual or family circumstances, opting for investment products with withdrawal flexibility.
Financial management pitfall 4: Sole reliance on personal research
Relying solely on online resources to acquire financial knowledge may prove insufficient. Due to time constraints, ordinary investors may struggle to fully grasp and analyse the characteristics of all investments or financial products. Thus, seeking assistance from professional and reputable institutions to devise an overarching asset allocation plan is advisable.
【FortuneXtra Savings Plan(2-Year Pay)】For a limited time only, enjoy a guaranteed preferential interest rate of 8.8% p.a. for the first year on prepaid premiums.*
Benefits of savings insurance
As a long-term financial management tool, savings insurance boasts numerous advantages and plays a pivotal role in commencing the journey to wealth growth. Savings insurance not only facilitates asset appreciation and protection but also caters to long-term family financial management needs, particularly for individuals seeking steady wealth expansion.
1. Wealth appreciation: Savings insurance offers robust asset value appreciation capabilities. Through regular premium payments, policyholders can accumulate long-term savings and realize asset appreciation via investment portfolios managed by professional financial advisors, ensuring risk control and long-term stable returns.
2. Risk diversification: Savings insurance typically invests funds in diversified financial instruments, including stocks, bonds, real estate, and private equity, to achieve risk diversification. This investment strategy mitigates single-asset risk, enhancing investment portfolio stability and security.
3. Family safety: In addition to asset appreciation, savings insurance provides life protection. In the event of the policyholder's accidental death or serious illness, the policy offers a certain level of protection, streamlining the inheritance process and making it an ideal choice for family long-term financial management.
4. Retirement planning: Savings insurance serves as an excellent retirement planning tool. Through regular savings and investments, policyholders can secure a stable income post-retirement, maintaining their standard of living. Retirement plans typically offer tailored financial solutions based on the policyholder's needs and goals.
【FortuneXtra Savings Plan(2-Year Pay)】For a limited time only, enjoy a guaranteed preferential interest rate of 8.8% p.a. for the first year on prepaid premiums.*
How to choose savings insurance?
When selecting savings insurance, consider the following key factors:
- Strength and credibility of the insurance company: Opt for an insurance company with strong financial stability and a stellar reputation to safeguard your assets.
- Policy rate of return: Compare the return rates of different policies and opt for one with stable returns and low risk.
- Policy flexibility: Choose a flexible policy, allowing deposit withdrawals or policy content modifications as needed.
- Policy coverage: Ensure the policy coverage aligns with your needs, encompassing life protection, accident protection, etc.
- Policy term: Select a policy term aligned with your investment objectives and time horizon to ensure continued asset growth.
【FortuneXtra Savings Plan(2-Year Pay)】For a limited time only, enjoy a guaranteed preferential interest rate of 8.8% p.a. for the first year on prepaid premiums.*
Features of AXA’s FortuneXtra Savings Plan
AXA has introduced the 'FortuneXtra Savings Plan', designed to not only enhance asset value but also cater to everyone's life protection needs. With flexibility at its core, it offers up to 9 currency options, along with currency conversion flexibility and policy value lock-in options. Moreover, it provides the ability to split the policy and designate both the backup holder and the insured, offering the flexibility to nurture your wealth and explore global opportunities. Other notable product features include:
- Choose from up to 9 policy currencies, including RMB, USD, GBP, etc.
- Unlimited number of times† of policy currency conversion in whole or in part
- First-in-market**: Dual currency lock-in accounts to accumulate interest and make flexible withdrawals anytime
- Divide your policy into multiple separate policies: More flexible financial planning
- Flexible and comprehensive inheritance options, including changing the insured and appointing a contingent owner for an unlimited number of times
- Achieve ambitious goals with considerable potential returns
For more information on the FortuneXtra Savings Plan or a comprehensive protection and savings plan suitable for you and your family, please get in touch with AXA’s professional financial consultants.
* By paying a lump sum amount which is equal to 2 times the amount of the initial annual premium for the basic plan of FortuneXtra Savings Plan (2-year pay) with policy currency of USD at the time of application. Promotional period ends on 30 Apr 2024. Terms and conditions apply. For details, please refer to the relevant promotion leaflet.
† Commencing from the designated policy anniversary, you can apply to exercise the currency conversion option within 30 days of each policy anniversary. Please note that the currency conversion can only be applied for once in a policy year.
**This reference pertains to savings insurance plans of a similar nature introduced post-2011. After securing the policy value, you can maintain dual currency accounts under the same policy (as per AXA's internal market survey, data accurate as of November 2021).
The above content is reviewed by Mr Daniel Lau - Head of Wealth Management Training of AXA Hong Kong and Macau.
The plan is subject to the terms, conditions and exclusions of the relevant policy contract. AXA reserves the final right to approve any application. For detailed terms, conditions and exclusions of the plan, please refer to the relevant policy contract.
No warranty or responsibility is assumed by AXA Hong Kong and our related or holding companies regarding non-infringement, security, accuracy, completeness, adequacy, reasonableness, fitness for a purpose or free from computer viruses in connection with the information and materials provided. AXA Hong Kong and our related companies and holding companies do not accept any liability for any loss, damage, cost or other expense, whether wholly or partially, directly or indirectly, arising from any error, inaccuracy or omission of the information and materials to the extent that such liability is not excluded by law.
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