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Why Do the Very Rich Buy Life Insurance?

May 10, 2017



A Silicon Valley billionaire recently purchased $201 million in whole life insurance.


Why would a billionaire need insurance?  Three reasons: tax laws favor insurance, estate liquidity and estate equalization.

No matter how wealthy you are, whole life insurance can be a good investment.



Tax Laws

With an irrevocable life insurance trust funded with life insurance, you would not have to liquidate properties or businesses to pay the taxes that are close to 40-50%. 


Estate Equalization

When the super-rich want to give equally to their children where non-liquid assets are involved, life insurance is a viable way to provide financial fairness.


Estate Liquidity
The death benefit is a liquid asset.


Why Is Whole Life Insurance Good for Everyone?

1.  The death benefit is a tax-free liquid asset.

2.  The cash values grow tax-free.

3.  Inheritance taxes can be avoided by having the policy owned outside the estate.

4.  Living benefits through growth of cash value.

5.  Protection against market risk.

6.  Protection against interest rate risk.

7.  Protection against creditors.

8.  Protection against disability.

9.  Protection against the cost of health care during retirement years.

10. Provides collateral.


You don't have to be super-rich to buy whole life insurance!  You do want to have the capital to afford the higher premium and take advantage of a tax free environment.  Diversification is key to a financially strong portfolio.....whole insurance would hedge any doubts.  


If your portfolio does not include insurance products, please call me to today!  I would be happy to help you with a tax-free insurance plan for you and your loved ones.






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