【Middle-Class Wealth Relay】Using Life Insurance as a Baton to Pass on Wealth to Loved Ones

For many middle-class families, wealth inheritance is a lifelong relay race. Accumulating and growing assets over years of hard work, and successfully passing this love and wealth to the next generation, is a vital life lesson.

However, unlike the ultra-wealthy who have family offices or dedicated legal teams, middle-class families often lack professional support and fall into a misconception: they believe that simply leaving behind cash or property equates to completing the wealth relay. Such inheritance not only overlooks the market risks of overly concentrated assets but also fails to account for the tax and legal costs during the transfer process. If family disputes arise over distribution issues, it can not only damage familial relationships but also destroy a lifetime of hard work. Therefore, middle-class families absolutely need a comprehensive inheritance plan.

Traditionally, when planning wealth inheritance, people often consider wills or trusts, but both have significant limitations: wills are rigid in content, lack growth potential, and cannot adapt flexibly to future changes; trusts come with high entry barriers and ongoing management costs, with complex procedures that may not be suitable for middle-class families. In comparison, a well-structured life insurance policy can help policyholders run faster and further in the wealth relay race while smoothly passing the baton to the next "runner". To ensure that life insurance truly serves its purpose, the key lies in whether it includes the following six essential elements for passing the baton: 

When parents pass on their wealth to their children, their greatest concern is that, due to a lack of experience, their children may not manage the assets wisely. The "Death Benefit Payment Option" in life insurance can alleviate this worry by allowing the policyholder to pre-determine the manner in which the death benefit is disbursed, effectively setting the length of the runway for this wealth relay race.

The policyholder can decide whether the beneficiary receives the death benefit immediately, upon reaching a specific age, or after a designated number of years following the policyholder's passing. The payment method can also be flexibly chosen, such as a lump-sum payment, periodic annuity payments, or even a combination of both. Even if the parents are no longer around, the wealth can still be transformed into a lasting blessing as per their wishes, rather than a large sum that risks being squandered. 

Viewing a legacy policy as a wealth relay race, the greatest fear is a "dropped baton" mid-race, causing the event to end. The "Contingent Insured" serves as the "second runner" for this very purpose. Upon the death of the original insured, they seamlessly take over, allowing the policy's value to continue accumulating and ensuring the race goes on.

Meanwhile, the "Contingent Policy Beneficiary" acts as a "supporting coach," whose responsibility is to manage the policy after the policy owner (i.e., the policyholder) passes away. If the successor child is not yet of age, they manage the policy on their behalf until the child can independently take control, safeguarding the legacy process with precision and care. 

If the growth of a policy's value is likened to an infinitely extending relay race track, then the lifespan of the insured determines the length of the current leg of the race. The "Change of Insured" feature allows the policyholder, during their lifetime, to pass on the role of the "runner" to a younger generation. This action is akin to seamlessly extending the track into the future, enabling the policy to continue accumulating value and be handed over to an infinite number of "runners", achieving the perpetual传承 of wealth.

A wealth relay race requires ensuring that wealth is accurately passed on to the designated person. However, life is unpredictable. If the primary beneficiary of a policy unfortunately passes away before the policyholder, and the policyholder is unable to designate another beneficiary in time; or in extreme circumstances, if the policyholder and the primary beneficiary pass away simultaneously, the fruits of this effort may not be smoothly handed over to the intended family member.

The role of a "secondary beneficiary" is to step in when the death benefit cannot be delivered to the primary beneficiary due to the aforementioned situations. In such cases, the designated secondary beneficiary receives the benefit, preventing the insurance payout from being delayed by lengthy legal processes or disputed distributions contrary to the original intent. This arrangement is akin to purchasing "double insurance" for a legacy plan, ensuring that the policyholder's carefully crafted blessings are accurately delivered to the final designated person.

The race for wealth accumulation spans across the globe. If the currency allocation of assets does not align with the needs of the next generation, the value of inheritance may be diminished due to exchange rates and conversion losses.

The "Currency Conversion" feature allows policyholders to convert their policy into the local currency (such as GBP, AUD, or CAD) after a specified period, based on actual needs, such as their current place of residence (e.g., the UK, Australia, or Canada). This design ensures that no matter where they are striving, this financial support from their family remains a vital backing.

When there are multiple children, a single policy may not be flexible enough for inheritance. The "Policy Split" feature allows the main policy to be divided into multiple separate policies, transforming it into several independent "batons" to be passed on to each child. This is not merely a simple asset distribution, but rather a way to provide each child with their own dedicated start-up fund, which can be flexibly used for entrepreneurship, further education, or other personalised goals, turning a single blessing into multiple targeted forms of support. 

Taking into account the six key factors mentioned above, a truly effective inheritance tool should not only possess individual functions but also integrate them to form a comprehensive solution that is both flexible and protective. There are few products on the market that fully encompass these features. BOC Life’s life insurance product¹ is designed with this in mind, aiming to provide a one-stop solution for middle-class families. It addresses every detail from wealth accumulation to intergenerational transfer, helping policyholders achieve peace of mind in their financial planning and enabling the smooth transfer of wealth to the next generation, or even across unlimited generations.

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Remarks:
1. The above examples reference product features from BOC Life, including the Legacy Torch Global Whole Life Insurance Plan, Wealth Legacy Global Whole Life Insurance Plan, and Monthly Joyful Income Whole Life Insurance Plan.
2. Last updated date of this article: 26 September 2025 

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.