When it comes to life insurance, many people assume that those with a high net worth don’t need that kind of financial protection. After all, if someone has an estate worth millions, what is a life insurance policy going to protect? However, there are plenty of reasons why your wealthy clients need to get a plan in place for the inevitable. Today, we’re going to highlight the top five benefits of life insurance for those who have a high net worth.
Currently, the minimum amount for an estate to incur federal taxes is $11.4 million. Although this figure is higher than in previous years, there is no guarantee that it will stay where it is - it could come down in the future. On top of that, if your clients live in a state with lower estate tax thresholds, they could be looking at even more taxes being taken out once they’re gone. Fortunately, life insurance can help mitigate these losses.
Related Post: Tax Benefits of Life Insurance
#2 Personal Debts
Being wealthy doesn’t automatically mean that a person doesn’t have debt. For high net worth individuals, that debt could also be substantial, cutting into the amount left over for loved ones. Without an insurance plan in place, family members could be forced to sell assets to cover these debts, which will diminish the legacy left behind.
#3 Wealthy Lifestyles
For the most part, wealthy people live life to a much higher standard. Because of this, the cost of living can be substantially higher than it is for those with more modest salaries. Drafting a cost effective insurance policy can help protect your client’s loved ones from having to make sacrifices after they’re gone. Property taxes, mortgages, monthly expenses - all of these things can add up and drain an estate quickly. If your clients are the primary breadwinners, they need to make sure that their loved ones can maintain the lifestyle to which they’ve become accustomed.
#4 Business Debts
Chances are that your high net worth clients own a business or two. In some cases, those companies may have substantial outstanding debts, which could become a liability once your client dies.
The business owner is usually key to the value of the business. The profitability could weaken once he or she is gone. A comprehensive life insurance policy could mitigate those losses and keep the company afloat afterward.
#5 Terminal or Long-Term Illnesses
No matter how wealthy someone is, diseases can strike at any time. Unfortunately, long-term health care can be highly expensive, particularly if your clients want in-home care. Even with health insurance, these costs can be thousands of dollars per month, which can wipe out the sturdiest of retirement or savings plans. Today's policies may have living benefits that address these needs.
Contact Advisor’s Resource Company Today
Building a high net worth insurance plan doesn’t have to be complicated. Let our team assist you in bringing the best policies to your clients so that they can have peace of mind.