Life Insurance Guide for High-Net-Worth Individuals (2024)
Life insurance for high-net-worth individuals can cost as little as $9/mo. Life insurance rates for high-net-worth individuals depend on age, health, and lifestyle choices, and high death benefit amounts are more costly. Wealthy policyholders usually choose permanent life insurance policies because they're better for long-term coverage.
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Ty Stewart
Licensed Insurance Agent
Ty Stewart is the founder and CEO of SimpleLifeInsure.com. He started researching and studying about life insurance when he got his first policy for his own family. He has been featured as a life insurance expert speaker at agent conventions and in top publications. As an independent licensed life insurance agent, he has helped clients nationwide to secure affordable coverage while making the...
Licensed Insurance Agent
UPDATED: Mar 14, 2024
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Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
UPDATED: Mar 14, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- The average cost of life insurance is $9 per month for younger policyholders
- High-net-worth individuals can use life insurance to protect their assets
- Life insurance offers a tax-protected method of wealth transfer and doesn’t go through probate
Life insurance for high-net-worth individuals is recommended to ensure wealth and debts are taken care of after someone passes away. But why do wealthy people need life insurance?
Read through this short guide to learn how much life insurance rates for high-net-worth individuals cost and how life insurance can be an asset.
Why wait to find life insurance quotes for high-net-worth individuals? Enter your ZIP code in the free comparison tool above to compare multiple life companies and insurance products near you.
How much is life insurance for high-net-worth individuals?
Life insurance for the wealthy is no different than life insurance for anyone else. People with a high amount of income are able to make the same coverage choice for insurance as someone who earns less. However, as wealthy individuals usually have bigger budgets, they tend to have have more options as customers. And since they need larger policies, the higher death benefit can impact rates.
If you’re looking for a standard term life insurance policy, start with the best life insurance companies, and not just the largest insurers. Check out their monthly rates below.
Average Monthly Life Insurance Rates and A.M. Best Rating by Company
| Company | Average Monthly Life Insurance Rates | A.M. Best Rating |
|---|---|---|
| Allstate | $15 | A+ |
| Banner Life | $9 | A+ |
| Guardian Life | $10 | A++ |
| Haven Life | $11 | A++ |
| John Hancock | $11 | A+ |
| MassMutual | $10 | A++ |
| Mutual of Omaha | $12 | A+ |
| Nationwide | $13 | A+ |
| New York Life | $11 | A++ |
| Northwestern Mutual | N/A | A++ |
| Pacific Life | N/A | A+ |
| Primerica | N/A | A+ |
| Principal | $9 | A+ |
| Protective | $9 | A+ |
| Prudential | $16 | A+ |
| State Farm | $15 | A++ |
Read more:
- Banner Life Insurance Review & Complaints
- Guardian Life Insurance Review & Complaints: Life, Disability & Dental Insurance
- Mutual of Omaha Insurance Review & Complaints: Life Insurance
- Pacific Life Insurance Review & Complaints: Life Insurance
- Primerica Insurance Review & Complaints: Life Insurance
- Prudential Insurance Review & Complaints: Life Insurance
These rates reflect the cost of term life insurance for policyholders under 40 with $100,000 death benefits for a ten-year term.
Any permanent life insurance will cost five to ten times more than term life insurance. Ultimately, your life insurance rates are determined by everyday life factors like age, health, and lifestyle choice.
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Recommended Life Insurance Policies for High-Net-Worth Individuals
Permanent life insurance is more efficient as a long-term solution. Whole life insurance and universal life insurance carry cash value benefits.
There are different types of universal life insurance – each type has a unique coverage method, cash value, and even investment opportunities.
Annuities, disability insurance, and long-term care insurance are also products wealthy people should consider to cover all their bases and protect their wealth from unexpected out-of-pocket costs.
Most life insurance companies have several products to choose from, so shop around until you find a life insurance company with a high-net-worth insurance option.
How does life insurance protect high-net-worth individuals?
Tax laws favor life insurance. Business owners, generational wealth, and other assets can be protected if it’s tied to life insurance.
For example, you can borrow money against your death benefits, but only through permanent life insurance.
Borrowing and paying back money against your life insurance is known as infinite banking or cash flow banking – a life insurance strategy that must be handled carefully.
If you pay the money back before you pass away, it won’t affect your death benefits. However, money that you don’t pay back is deducted from your coverage limit. Debts that you owe are also taken out of your death benefits.
Because life insurance doesn’t go through probate and is tax-free, it can provide a method of wealth transfer that avoids estate taxes.
Why is life insurance for high-net-worth individuals important?
Life insurance is one of many ways to protect family, business partners, and other beneficiaries after you’ve passed away. It’s even more important for wealthy people because the asset and debt costs are generally higher. (For more information, read our “Is life insurance considered an asset?”).
Reassure yourself and get life insurance to avoid any unexpected costs your loved ones or business partners may face.
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Life Insurance for High-Net-Worth Individuals: What’s the bottom line?
A cost-efficient term life insurance policy is always an option, but wealthy people may want permanent life insurance to provide long-term tax protection for wealth transfer.
Always start with the best insurance companies to find the best rates and reputation. Your income level will not affect your rates, but selecting a high death benefit does make insurance more expensive.
Now that you have more knowledge about life insurance for high-net-worth individuals, use our free online quote tool below to compare the best companies in your local area.
Case Studies: Life Insurance for High-Net-Worth Individuals
Case Study 1: Protecting Wealth and Beneficiaries
John is a successful entrepreneur With a substantial net worth. He understands the importance of protecting his wealth and ensuring financial stability for his beneficiaries. By obtaining a permanent life insurance policy, John can create a tax-efficient method of wealth transfer that avoids estate taxes. This strategy allows him to provide for his loved ones and business partners while preserving his assets.
Case Study 2: Leveraging Life Insurance for Infinite Banking
Sarah, a high-net-worth individual, is interested in utilizing her life insurance policy for infinite banking. She wants to borrow money against her death benefits to fund investments and business ventures. With careful planning and management, Sarah can take advantage of the cash value benefits provided by her permanent life insurance policy.
Case Study 3: Comprehensive Coverage for Complex Financial Situations
Michael and Elizabeth are a wealthy couple With intricate financial circumstances. They have substantial assets, potential estate tax liabilities, and a desire to leave a lasting legacy through charitable donations. To address their specific needs, they opt for a comprehensive life insurance plan that includes coverage for estate tax obligations, business succession planning, and charitable giving.
Frequently Asked Questions
What is life insurance for high-net-worth individuals?
Life insurance for high-net-worth individuals is a specialized type of insurance coverage designed to meet the unique needs and considerations of individuals with substantial wealth. It provides financial protection and estate planning benefits tailored to their specific circumstances.
Why do high-net-worth individuals need life insurance?
High-net-worth individuals often have complex financial situations, significant assets, and potential estate tax liabilities. Life insurance can help protect their wealth, provide liquidity to cover estate taxes, fund charitable donations, facilitate business succession, and maintain financial stability for their beneficiaries.
What are some key features of life insurance for high-net-worth individuals?
Key features often include:
- High coverage amounts: Policies can offer substantial death benefit amounts, allowing for comprehensive protection of wealth.
- Flexible premium options: Customizable premium payment structures to align with the individual’s financial goals and cash flow.
- Estate tax planning: Life insurance can help offset potential estate tax liabilities by providing tax-free death benefits to cover estate settlement costs.
- Wealth transfer: It allows for efficient wealth transfer to beneficiaries, bypassing probate and providing liquidity for estate-related expenses.
- Charitable giving: Policies can facilitate donations to charitable organizations, offering potential tax advantages and supporting philanthropic goals.
Are there different types of life insurance available for high-net-worth individuals?
Yes, there are different types of life insurance options, including:
- Term life insurance: Provides coverage for a specific period, typically 10 to 30 years. It offers high coverage amounts at a relatively lower cost.
- Permanent life insurance: Offers lifetime coverage and includes options such as whole life, universal life, and variable life insurance. These policies often have a cash value component that can grow over time.
- Survivorship life insurance: Covers two individuals, usually spouses, and pays out the death benefit after both individuals pass away. It can be useful for estate planning purposes.
How is life insurance for high-net-worth individuals underwritten?
Underwriting for high-net-worth individuals often involves a comprehensive assessment of their financial situation, including their net worth, income, assets, and potential estate tax liabilities. Insurers may require more extensive documentation and perform thorough risk analysis due to the larger coverage amounts involved.
Are you looking for free insurance quotes?
Your one-stop online insurance guide. Get free quotes now!
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Ty Stewart
Licensed Insurance Agent
Ty Stewart is the founder and CEO of SimpleLifeInsure.com. He started researching and studying about life insurance when he got his first policy for his own family. He has been featured as a life insurance expert speaker at agent conventions and in top publications. As an independent licensed life insurance agent, he has helped clients nationwide to secure affordable coverage while making the...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.