JAMAICANS seeking to build intergenerational wealth can do so with the help of life insurance, according to Matthew Fisher, financial advisor at Sagicor Life Insurance Company.

“Having some insurance is always better than having none,” Fisher outlined as he shared a desire for Jamaicans to be more aware of how life insurance can be one way to help provide a sense of financial security for their family while helping to build inter-generational wealth.

Generational wealth is essentially monies or assets passed down from one generation to the next. It can be crucial for the security of any family’s financial future. Wealth can be passed down through a family business, stocks, real estate, and even life insurance.

“It is one of the easiest methods to build [inter]generational wealth because you can start a policy today at a coverage of $50 million. [If] you pass away tomorrow, whoever is that beneficiary gets that $50 million dollars… and that money is tax free, so the government can’t touch it,” Fisher asserted in an interview with the Jamaica Observer.

He explained that life insurance can be a useful tool to help beneficiaries pay off debt and provide income.

“If you’re a person who grew up in poverty and you see the struggles that you had to go through because nothing was in place for you, when you realise that and you have your kids and you don’t want the same for your kids, you’re going to want to put things in place,” Fisher continued. “Once you’re earning an income that’s the first sign that you need life insurance.”

Although the amount paid each month would depend on a person’s disposable income, Fisher explains that life insurance has been a tool used by the rich for years to keep wealth within the family, and low-income earners can do the same, but must be realistic.

“What can you afford currently?” he asked rhetorically. “It can always be increased. So I suggest, based on your situation, you probably start small, ’cause having some insurance is always better than having none.”

He noted that the right financial advisor should be able to tailor a policy to meet each person’s budget while explaining that funds from a life insurance policy can even be used to help a child get through college if the breadwinner passes away suddenly.

For those who are relatively well-off financially, Fisher recommends estate planning to eliminate some of the expenses associated with transferring assets after death.

On top of that, it’s a safer bet than other types of investment, which can suffer from market volatility.

“Persons, especially in Jamaica, don’t believe in ‘dead lef’ money, but that’s not the only benefit of life insurance. It’s not just for family income protection, but it also has living benefits that a lot of people are not aware of,” Fisher said. That living benefit comes in the form of savings, which are increasingly forming a part of life insurance policies and can be called upon in the event of an emergency or any other use, like a vacation.

He also recommends having a critical illness plan to help pay for certain medical expenses, which can deplete savings, as a part of building intergenerational wealth, making note of several illnesses, like cancer, that are becoming more prevalent.

“You being diagnosed with cancer, as simple as it is, maybe breast cancer, to do a surgery will cost you millions. The treatment, costs you millions, and the medication costs you thousands. Those are crazy expenses that could be eliminated if you had critical illness insurance.”

Fisher pointed out that critical illness coverage of at least $10 million is the better option and if you can’t afford it right now, starting small and slowly increasing each year as your salary increases is the smarter way.

In many cases, borrowing money to pay medical bills or burdening children can put the family in debt. After diagnosis, when the money is paid out it goes directly to your bank account and whatever remains is yours.

“Most of the time, millions are left over. I see it all the time. People use the remainder [to] pay down on a house or even to build a house because the money is theirs tax free.”