Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: May 13, 2021

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The Brief

  • Rich people need life insurance
  • Life insurance for high-net-worth individuals can be used to protect inheritance
  • The right insurance depends on how you plan on using it

High-net-worth individuals might wonder how much does whole life insurance cost and is it worth it? Life insurance can be used by wealthy people as an asset, to protect an inheritance, and to protect a business. Learning more about how life insurance for high-net-worth individuals can benefit someone will help you make a purchasing decision.

To find more information on affordable life insurance for high-net-worth individuals rates, enter your ZIP code to find the best life insurance quotes in your area.

Why do rich people need life insurance for high-net-worth individuals?

Everyone can use life insurance and there are multiple reasons why rich people should buy life insurance for high-net-worth individuals.

Estate taxes can significantly decrease assets you wish to pass down to loved ones. The death benefit of a life insurance policy is almost always exempt from these taxes.

If you suddenly become ill, the medical expenses could also impact the inheritance you leave.

Permanent life insurance allows you to build a cash value that can cover these expenses and ensure you keep your wealth intact for your loved ones. It will also ensure that your loved ones aren’t left with the burden of paying those bills.

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How can life insurance for high-net-worth individuals be used?

Wealthy individuals can use life insurance in several ways. One way in which life insurance can be used is as an asset. Some permanent life insurance policies include a cash value.

When the policyholder feels as though they no longer require insurance, the policy can be sold as a life settlement.

Some life insurance companies also offer tax-free dividends. After passing the life insurance underwriting test, this policy will allow a person to create an additional income stream to be used to increase their wealth or provide more money for future inheritance.

What do life insurance companies test for in underwriting? Underlying health concerns, for starters.

Companies also use life insurance to protect a business. A keyman policy can be created to protect a business should a key person die before a replacement is found.

For this type of policy, the business itself serves as the beneficiary.

What is the best type of life insurance for high-net-worth individuals?

Two different types of high-net-worth insurance can be purchased from a life insurance company. Term life policies are those that last for a limited amount of time.

Permanent life policies last for the remainder of the policyholder’s life. Understanding what you need and what the different policies offer will help you choose a policy.

According to the Insurance Information Institute, decide if you need to add any riders to your policy, shop around, and inform your beneficiaries about your policy.

If a person is concerned that estate taxes will negatively impact the assets they plan on passing on to loved ones, they might only require enough coverage to cover the losses.

Term life policies are a good choice for these people. Those looking to build up a cash value that they can later cash out will require a permanent life policy.

Life Insurance for High-Net-Worth Individuals: The Bottom Line

There are several ways in which wealthy people can use life insurance. They can use it as an asset, to protect the inheritance they want to leave for loved ones, and to protect their wealth.

Learning more about life insurance for high-net-worth individuals company will help you protect your future.

To learn more about life insurance for high-net-worth individuals quotes, enter your ZIP code to find the top life insurance rates in your area.