A few years ago, a well-known billionaire in the tech industry took out the largest life insurance policy in the history of the industry: $201 million in insurance.
Unfortunately no one knows who it is or many of the details of the policy because… life insurance is a private contract, the details of which ain’t none of yo beezwax.
Why would a tech billionaire bother with such a “frivolous” purchase?
Many reasons really but the simplest (and probably most obvious) is the pay the estate tax on his monies.
If you buy a whole life policy, insurance premiums never exceed your total death benefit.
Meaning, you get to do more with your savings than you otherwise would while you’re alive.
So, if you have final expenses of $10,000, you can either spend $10,000 of your own savings on it or… maybe $4,000 in premiums for a $10,000 life insurance death benefit or… maybe $1,400 in premiums for same.
Meaning, you can spend the $9,000 you were going to set aside in a “self-insurance” fund and enjoy that money while you’re alive.
It’s such a simple play that it baffles my mind why more people don’t do this.
It don’t matter whether you have $20,000 in savings or $2 billion. It works the same way.
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