How Can Life Insurance Impact the Wealthy?

When you’re a high-net-worth individual, it’s easy to think that you don’t really need a life insurance policy because you already have enough money and investments that can secure you financially. However, this isn’t always true. By definition, high-net-worth individuals have no less than $1 million in investable assets. Of course, that is just a modest estimate and your total wealth could be much higher than a million dollars. Naturally, you may want to keep as much wealth in the family as possible, passing along assets to future generations. Life insurance in Houston, TX is one of the smartest things you can do to protect you from all types of risk.

 

Life Insurance for Wealthy Individuals

 

Even though you can probably self-insure, there are still many reasons why someone wealthy should get life insurance coverage. Whether it’s to protect your assets from your liabilities or protect your business partners, here are a few reasons to consider life insurance for the wealthy.

 

  1. To pay final expenses and medical debt

Although the average funeral costs around $8,000, for high-net-worth individuals, that figure could be several times higher. That could be fairly easy to manage if you leave an estate with $1 million or more in financial assets. However, medical costs are a different story. Even though health insurance policies have fixed deductibles and out-of-pocket maximums, a situation such as prolonged terminal illness could result in higher medical costs. If extended nursing care is included, you could be looking at hundreds of thousands of dollars. Life insurance could cover these costs, leaving your entire estate untouched to your family.

 

  1. To pay off personal debts

It’s entirely common for wealthy individuals to underestimate the amount of debt they have. For example, if your gross estate value is $5 million but you owe $2 million in various loans, your loved ones could be forced to liquidate much of your estate to settle those debts. The harsh reality is that once you’re gone, your estate may remain, but your income will go with you. While you may have been comfortable taking on debts when you had a steady income, your family might not be able to handle them. Leaving your family with sizeable debts could result in them selling assets below market value and even struggling financially. Life insurance can help to pay off these debts when you go so that your family doesn’t have to.

 

  1. To protect your business

Business owners can certainly benefit from buying life insurance. If your company mainly relies on you, your death will certain create a situation that leaves your business vulnerable. Insurance benefits can be used to cover the buy/sell agreement that ensures that your company stays afloat under the management of your trusted partners or co-owners. It means your company will keep running and maintain its stability without changing ownership or being forced to reduce in size. Your share from the company will still go to your heirs, too.

 

Looking for the right life insurance? The team at J. Archer Insurance Group are ready to help. Serving Houston, Texas and beyond, contact us today. We can help you find suitable coverage that meets your high-net-worth needs and lifestyle. As well as insurance, we offer risk management and consulting services so that you can be sure you are in good hands. We are excited to help you secure your financial future today.

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