Why The Rich Need Life Insurance

Life Insurance

High-value life insurance is a secure and unique insurance plan especially designed for high net worth individuals like yourself who are business partners, directors, and large business owners, having large illiquid assets such as large real estate investments, machinery, accounts receivables, etc.  This type of life insurance plan provides massive amounts of coverage from USD 1 million up to USD 200 million. It provides the opportunity for you to develop a very large asset base and offers guaranteed minimum accumulation benefit protecting you from market fluctuations.  In a nutshell, life Insurance for HNWIs/UHNWIs is recommended so that they / their families/businesses continue to run at the same level of comfort and guarantees that they are used to.

Why should high net worth individuals buy high value life insurance policy?

As an HNWI/UHNWI individual, your needs are unique and hence only bespoke solutions are appropriate for you. These high-value insurance plans can be designed to meet your individual needs. Some of the reasons why one should consider a high-value life insurance policy are as follows:

Business Continuity

High-value life insurance can help your business when insurance is taken on all the partners or keyman and the company pays for it.  In the event of a claim, claim proceeds come to the business and can be used by the surviving partner to pay to the deceased partner’s successors towards buy out of his share in the business.  In this way, there is no cash stress on the business to pay off the deceased partner’s family and continue running the business.  In a sole proprietorship business, the family gets liquidity in the business and is not having to rush to sell the assets to pay running expenses or short-term/long-term liabilities.  The cash payout helps the business to remain stable and gives time to the family to consolidate the business and carry on profitably.

Structuring Tax and Other Liabilities

It is vital for you to make sure that your estate has the liquidity to pay debts and estate taxes. In case the estate is expected to exceed the exemption amounts, planning for tax liabilities becomes important because paying off federal tax can be cumbersome and is typically due within the year of the estate holder’s death date. High-value life insurance can play a vital role in paying off estate taxes.

Legacy and Estate Planning

Estate planning is not only about estate tax avoidance/reduction, but it is also about taking care of family, dependents, and dealing with complications of transferring business, real estate, privacy protection, creditor protection, probate cost avoidance, and so on. A high-Value policy helps you fairly divide your assets amongst your successors.  For example, if one of the children is not interested in joining the business, then life insurance proceeds can go to him/her and another child gets full control of the business. Legacy planning involves a lot more than estate planning. Rather than planning for “when I am dead”, it involves developing plans for things you value, the beliefs you have, the people you love, and passing all these to successive generations. A high-value life insurance can help you realize these plans in a much better way by providing the financial security you need. Apart from this, keyman protection, wealth preservation, and charitable giving are also other key objectives of buying jumbo life insurance. To conclude…

The very definition of rich implies that one is wealthy and has a great deal of money or assets. And that is typically the reason why a high net worth individual, like yourself, might undermine the importance and need for life insurance. You may assume that you already have enough wealth to protect your business and family, in case of your sudden demise or a slowdown of business due to a critical illness that you may suffer from. However, as experience has shown us and hopefully, we have been able to convince you, that is not always the case. A jumbo life insurance policy plays a very important role in estate planning as well as providing immediate liquidity to your family and/or business in case of your death or if you are diagnosed with a critical illness. Our wealth of experience in this domain will ensure that you, your assets, and aspirations are well protected and transferred onto future generations or executed as you wished it to be. To learn more about high-value life insurance, please contact us at info@newageib.com

Leave a Reply

Your email address will not be published. Required fields are marked *