Do professionals in the cryptocurrency industry need insurance? What does my insurance look like?

Borrowing from Teacher Wu's tweet, I have indeed been buying insurance recently, and it's a high-coverage type. Let me explain why I decided to purchase insurance.

Firstly, the principle of the insurance I bought is based on returns. I won't mention the name, but the essence of this insurance is whether I can earn six times the return from now until "death." In other words, this insurance is essentially a rolling financial management insurance, ensuring that even if I die tomorrow, my family can still receive six times the return on my insurance.

Looking at the details, many friends can calculate that this is essentially me providing the principal while the insurance company manages the investment for a fixed return. In my case, with a coverage amount of $20 million, I need to make a one-time payment of $3.245 million. After the age of 100, I don't need to worry about it. If I die before 100, starting from the second year after the coverage begins, my family will receive a one-time payment of $20 million upon my death.

Of course, I don't want to die; life still holds great significance for me, and I have many unfinished things. However, if something were to happen to me, I want to ensure that my family won't fall into poverty due to my passing. That is the essence of insurance.

Indeed, I also have cryptocurrency assets; I have $BTC, some US stocks, and some fiat currency. These are all part of my legacy. However, after my death, I don't know how the cryptocurrency market will develop. I don't know if Bitcoin will go to zero or rise higher, and I don't even know if my family will be able to manage my cryptocurrency assets smoothly after inheriting them.

I don't know any of that, but I do know that the $20 million I leave for them is something they can actually control. I know that after my passing, they can continue to maintain their current lifestyle and not face hardship.

In fact, I believe many friends misunderstand the essence of insurance. To me, insurance is a hedge against my high-risk investments. I have already bought high-risk assets like Bitcoin, ETH, and BNB. If all my assets are high-risk, then if the industry faces a catastrophic blow, my assets could become worthless. But when I have money, I take a portion of my assets to hedge, which is very suitable and cost-effective for me.

This insurance was recommended to me by a neighbor in the traditional industry in Singapore. He talked to me for a long time until I truly understood that this is essentially an investment in the S&P 500 index. Yes, some friends say their investment banks are not good, and I think that's fine too, but I'm not sure I have the willpower and execution to leave that money untouched, and I also don't know if that money can grow to $20 million before my death.

This can be withdrawn in advance, but I'm not very interested in early withdrawal. What interests me the most is that Singapore's private banking recognizes this insurance from the insurance company. This insurance can be used to secure a 95% loan from the private bank. This means that as long as I use funds within the private bank to buy this insurance, I can directly re-loan 95% of that insurance amount to make other investments. Of course, loans come with interest. If you believe your profitability exceeds the interest, then it doesn't matter. If not, just leave it alone.

I'm not selling insurance, nor do I recommend any insurance. I just happened to see this today and wanted to share my own insurance. Apart from health insurance (commercial insurance), this is the insurance I bought to ensure that if one day I really pass away, regardless of how the cryptocurrency industry fares or what the value of my Bitcoin is, my family will receive $20 million.

Some friends might mention inflation. I can't be sure, but even in the worst case, if I die early, inflation won't rise six times, and my family will be able to manage this money well. If I die later, I believe my ability to earn will at least outpace inflation. This insurance serves merely as a "safety net," nothing more.

Therefore, I personally believe that friends with total assets over $1 million should consider similar insurance, using 20% to 30% of their funds to buy a long-term financial product to ensure that even in the event of their passing, they can leave at least $1 million in assets for their family.

The regulation of the cryptocurrency industry is becoming increasingly important. While there will still be opportunities for sudden wealth, whether that opportunity belongs to each of us and whether we can seize it, I don't know. However, what impressed me most when Brother Kan @tktang88 introduced this insurance to me was the unique responsibility of the breadwinner for the family. Perhaps before I die, I can still earn seven times or more, but that doesn't prevent me from allocating a portion of my assets to provide my family with a fixed $20 million return insurance. This way, even if I suddenly pass away, my family will have the ability to endure the toughest times.

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