The idea that wealthy people don’t need a life insurance policy is simply a myth. Since the inception of life insurance, there have been many wealthy people who have taken out policies to protect themselves and their families.
Remember, the main purpose for purchasing a life insurance policy is for the policyholder to ensure the future financial security of their family and estate. That applies to people of all income levels.
Many policyholders want their families to be able to maintain their existing lifestyles in case of their unexpected death. Therefore, it’s common to see wealthy individuals take out massive life insurance policies.
Let’s take a look at five of the biggest life insurance policies ever sold and the companies that sold them.
This policy was written by Tony Steigerwald of Dunhill Marketing and Insurance for an extremely wealthy client who declined to have their name publicly released. This is one of the biggest life insurance policies ever sold to an individual. The yearly premium for this policy cost an astounding $6,148,000.
According to Steigerwald, his client wanted this $212 million life insurance policy for two main reasons. First, the client wanted to this use this policy as part of their estate planning strategy. Next, the client wanted the payout from this policy to be endowed to their favorite institutions after their death.
The Silicon Valley is home to a lot of wealthy individuals who work in the technology industries in the area.
Recently, one unnamed Silicon Valley billionaire took the concept of large life insurance policies to a whole another level when he took out a policy worth a whopping $201 million.
According to Steven Felsenthal, a tax and estate planning attorney at Sugar Felsenthal Grais and Hammer, the policyholder likely took out this massive policy to ensure that his family would have enough money to continue to pay taxes generated by the policyholder’s assets that were worth billions of dollars.
Many wealthy people buy life insurance policies as a way to ensure that their family will be able to use the payout money to settle any outstanding debts that the policyholder held before their death.
One anonymous individual was so worried about covering his debts that he took out a $41 million life insurance policy to make sure his debts would be paid off even if he passed away. This policy was sold by Jan Pinney of Pinney Insurance.
This $15 million policy was sold by Brian Greenberg of True Blue Life Insurance. The client who purchased this policy was a business owner who had an annual income of $1 million.
According to Greenberg, the policyholder wanted the $15 million payout from this life insurance to act as income replacement for his family in case he passed away unexpectedly.
Income replacement is a simple concept to understand in this situation. Basically, instead of this policyholder’s family getting the $15 million lump sum payment upon the policy’s maturation, this $15 million would be invested by the insurance company.
The client’s family would continue to receive $1 million annually. That’s basically the money they would’ve received if the policyholder was still alive and earning his regular income.
There are many different types of life insurance policies. One such policy is survivorship life insurance also known as a joint-last-to-die policy. This policy covers two people (usually a married couple) and pays out a death benefit only after both of the people covered have passed away.
Chris Abrams of Abrams Inc Insurance Solutions recently sold one of the biggest survivorship life insurance policies ever. This policy—valued at $10 million—was sold to a couple who owned multiple businesses involving real estate and technology.
The couple transferred ownership of their life insurance policy to a family trust. This was likely done so the trust would have the funds required to execute the actions the couple had outlined in their will.
