Life insurance is a type of indemnity which will pay out a considerable amount of money, tax free, to your family, when you pass away.
The trick to finding the best life insurance is choosing the right type of insurance policy for your needs. Making a choice between whole life and term life insurance is something you should do after taking a number of factors into account.
While South Africa has had its fair share of stories relating to life insurance and some hefty sums that people have insured on their life, in 2014 a tech billionaire in the U.S. broke all records.
The individual, who was from Silicon Valley purchased the most expensive life policy ever, which was worth $201 million.
This beat the previous record of a $100 million life policy for an unnamed American entertainer.
The $201 million would be paid out upon the buyer’s death. The policy is split between 19 different companies and none hold more than $20 million or so of risk.
According to financial experts, by wrapping or pairing insurance products with trusts, insurance products can become an efficient way to protect assets from the estate and other taxes.
Essentially, this type of insurance policy can protect significant assets.
If you want to have a life insurance policy in order to provide your family with a regular income, you should calculate your current expenditure and consider the effects of inflation.
What affects life insurance premiums?
- The actual sum that is insured
- Your age
- Your health
- How much you drink or smoke
Keep in mind that the higher the risk, the higher the premium.
For the tech billionaire who purchased the most expensive life policy ever, having a life insurance policy of $201 million may be a savvy way of protecting some of their assets.