1. 63333 POINTS
    Peggy Mace, Certified Senior Advisor (CSA)®PRO
    CEO, Outlook Life, Inc, Most of the U.S.
    Wealthy people buy life insurance at far higher rates than one would expect. That is because of the tax advantaged nature of life insurance.

    Because it is protected from income tax, the wealthy can count on that sum of money to be there in full to pay inheritance taxes, estate taxes, and the cost of settling their estates.

    They can pass money to their heirs or charity, income tax free.

    They may purchase life insurance on parents or grandparents so that they can afford to buy the family business when the owners die. Or on themselves, so that they families continue to receive an income when they pass.

    Not only is the money tax advantaged, but the death benefit has the potential to provide far more to the beneficiary than what the insured person paid in.

    For this and numerous other reasons, life insurance is a part of the financial portfolio of many a wealthy person.
    Answered on February 3, 2014
  2. 1330 POINTS
    Mark TaylorPRO
    Licensed Life Agent, Life and Finance/ 50 States, New York
    Anyone can buy Life Insurance. The wealthy are shrewd with financial dealings. As an advisor many offers are dealing with estate preservation.  They are good with investment products due to their high financial assets. They buy at a higher premium amount to accumulate more wealth as what the advantage of Life Insurance permits.  At a higher payment for the policy. They can use the lump sum to keep taxes from cutting into the estate. They can cash in higher on cash values of the policy for the accumulation is higher due to the high investments. Finally, along with the lump sum millions they receive. People also can use this advantage at lower incomes if you like and would spend hundreds of dollars a month for a multi million dollar policy. It is always best to get the preferred rate at a younger age for lower premiums. My specialty.
    Answered on February 10, 2014
  3. 5877 POINTS
    Stan Cox IIPRO
    Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
    Good question! And there are lots of god reasons why wealthy people buy life insurance. And not just any life insurance, but typically WHole Life insurance. As mentioned above here wealthy people are usually concerned with estate preservation and estates worth over $5.6 million incur huge taxation at the death of the owner of the estate. So one reason is to pay the death tax on the estate.

    Also as mentioned above whole life insurance grows cash value tax-free or at least tax-deferred. And the growth is guaranteed, and with Mutual insurance companies dividends are also paid. And buying whole life insurance is like buying money at a discount with the possibility of considerable wealth growth. And of course the death benefit is paid to the beneficiary tax-free!
    Answered on October 9, 2015
  4. 10968 POINTS
    Tim WilhoitPRO
    Owner, Your Friend 4 Life, Brentwood TN
    Most wealthy people are wealthy because they are smart when it comes to understanding how money works. Part of this understanding is how taxes work. In the vast majority of the wealthy portfolios you will like find life insurance. This has more to do with sheltering their money from taxation. Just last year in CA a billionaire wrote a policy so large it took 21 life insurance companies to underwrite it. The policy now stands in the Guinness Book of World records at a face amount of $201 billion. I assure you this person did not spend this much money on premiums, can you imagine the price, just to be in the book of world records. It was totally about the tax advantages.
    Answered on November 2, 2015
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