Glossary entry (derived from question below)
English term or phrase:
Insurance wrapper
English answer:
structured investment
Added to glossary by
Fan Gao
Oct 11, 2006 13:32
17 yrs ago
13 viewers *
English term
Insurance wrapper
English
Bus/Financial
Insurance
Hi,
Could someone explain in simple, layman's terms what an insurance wrapper is and how they work?
I found this this definition: "The main goal of an insurance wrapper is to protect the contained assets from bankruptcy and litigation judgments should the need arise in the future."
However, I'm still not clear on how much protection they provide. For example, if your assets are protected by an insurance wrapper and your company or you are declared bankrupt, would your assets be 100% protected from people you owe money to or would the courts still be able to use your assets to pay off creditors?
Thanks in advance,
Mark
Could someone explain in simple, layman's terms what an insurance wrapper is and how they work?
I found this this definition: "The main goal of an insurance wrapper is to protect the contained assets from bankruptcy and litigation judgments should the need arise in the future."
However, I'm still not clear on how much protection they provide. For example, if your assets are protected by an insurance wrapper and your company or you are declared bankrupt, would your assets be 100% protected from people you owe money to or would the courts still be able to use your assets to pay off creditors?
Thanks in advance,
Mark
Responses
| 3 +2 | structured investment |
anastasia t (X)
|
Responses
+2
50 mins
Selected
structured investment
The first web reference canvasses how the insurance wrapper works.
IMOH, it is a kind of structured investment tool combining investment in funds and life insurance. When you buy life insurance, the investment companies invest premiums that you pay them on funds anyway. The insurance wrapper gives the policyholder the choice of funds to invest in. Instead of paying premiums, the policyholder pays with the assets or funds that he chooses. So, if the assets or funds have already been paid to the insurance company, they would not be considered your assets. In this sense, they are 100% protected, since creditors cannot lay claim on assets that do not belong to you.
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Note added at 1 hr (2006-10-11 14:56:44 GMT)
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Asset protection and asset insurance are too general. One may achieve asset protection/insurance without insurance wrapper, like options, futures, etc. Insurance wrapper is only one of the methods. Let me think about it. But since this kind of product has not made its way to China, surely that gives you a free rein to name it?
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Note added at 1 hr (2006-10-11 14:59:46 GMT)
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Have a look at this. It is helpful. There's already a standard Chinese equivalent for "wrapper".
http://www.pacificprospect.com/sp_china_2006/downloads/a/4.p...
保险包装???
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Note added at 1 hr (2006-10-11 15:05:52 GMT)
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The wrapper here means packaging. The investment is packaged in the form of an insurance.
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Note added at 1 hr (2006-10-11 15:22:49 GMT)
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The wrapper here doesn't mean that the insurance and the investment are bundled together. It means that the investment is packaged in the form of insurance to protect against bankruptcy and escape taxes legally.
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Note added at 1 hr (2006-10-11 15:26:11 GMT)
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As I told you, "bankruptcy protection" is a really generic term. There are infinite ways of structuring financial products to achieve "bankruptcy protection".
IMOH, it is a kind of structured investment tool combining investment in funds and life insurance. When you buy life insurance, the investment companies invest premiums that you pay them on funds anyway. The insurance wrapper gives the policyholder the choice of funds to invest in. Instead of paying premiums, the policyholder pays with the assets or funds that he chooses. So, if the assets or funds have already been paid to the insurance company, they would not be considered your assets. In this sense, they are 100% protected, since creditors cannot lay claim on assets that do not belong to you.
--------------------------------------------------
Note added at 1 hr (2006-10-11 14:56:44 GMT)
--------------------------------------------------
Asset protection and asset insurance are too general. One may achieve asset protection/insurance without insurance wrapper, like options, futures, etc. Insurance wrapper is only one of the methods. Let me think about it. But since this kind of product has not made its way to China, surely that gives you a free rein to name it?
--------------------------------------------------
Note added at 1 hr (2006-10-11 14:59:46 GMT)
--------------------------------------------------
Have a look at this. It is helpful. There's already a standard Chinese equivalent for "wrapper".
http://www.pacificprospect.com/sp_china_2006/downloads/a/4.p...
保险包装???
--------------------------------------------------
Note added at 1 hr (2006-10-11 15:05:52 GMT)
--------------------------------------------------
The wrapper here means packaging. The investment is packaged in the form of an insurance.
--------------------------------------------------
Note added at 1 hr (2006-10-11 15:22:49 GMT)
--------------------------------------------------
The wrapper here doesn't mean that the insurance and the investment are bundled together. It means that the investment is packaged in the form of insurance to protect against bankruptcy and escape taxes legally.
--------------------------------------------------
Note added at 1 hr (2006-10-11 15:26:11 GMT)
--------------------------------------------------
As I told you, "bankruptcy protection" is a really generic term. There are infinite ways of structuring financial products to achieve "bankruptcy protection".
Note from asker:
| Thanks Anastasia, that's great, makes a lot more sense. We've asked in Chinese kudoz too to try and find the equivalent Chinese term but it doesn't look like any banks or insurance companies offer this kind of service in China yet. Do you have any suggestions for a Chinese translation? Asset protection? Asset insurance? |
| Thank you. We'll go with packaging even though that's as vague as wrapper. Where these companies get these terms from I don't know! Why can't they just call it "bankruptcy protection" so at least people would have some clue as to what it involves. Anyway, thanks for all your help, it's really appreciated. |
4 KudoZ points awarded for this answer.
Comment: "Many thanks for your help."
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