Mystery California Billionaire Buys Record-Breaking Life Insurance Policy


UPDATED 11/20/20

Investing in a life insurance policy is smart for anyone who wants to make sure their family is provided for should a tragedy take place. Earlier this month, an unnamed tech investor billionaire took outandnbsp;a record-setting $201 million policy that will certainly accomplish that. SG, LLC, the California-based advisory firm that sold the policy is not legally allowed to release the name of the buyer, but narrowed it down to the 111 billionaires in the state.

The record was previously held by Peter Rosengard of the UK. But his policy was just under half of the new entry in theandnbsp;Guinness Book of World Recordsandnbsp;and totaled just $100 million.

For the average American, life insurance plans are certainly less valuable, and they are hardly ever as complex. The mystery billionaire’s policy will require yearly premiums in the millions and involves a whopping 19 different insurance companies. As a result, the schematics of the deal might be more amazing than its actual value.

So why would a billionaire want to take out a policy like this? What is the point?

Essentially, the policy will be helpful for tax reasons. California is one of the most-taxed states in the U.S. and policies like these are quite common, although not as expensive.

“It’s all about trust and estate planning,” said SG president and founder Dovi Frances. “Having a life insurance policy like this can protect significant assets.”

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“If your properties are leveraged then those loans are called immediately and need to be paid off,” he added. “So if you want to head yourself against such a risk [your beneficiary] can receive the proceeds [from life insurance] without being exposed to taxes.”

“It is a large policy, but it depends on how it’s set up and the reasons behind it,” explains Carrie Quraishi, Estate Planning Attorney withandnbsp;Quraishi Law. “If it was set up as an ILIT, or Irrevocable Life Insurance Trust, it would be estate-tax free.”

In the future, even the wealthy should take note of policies like this. While $200 million might be exorbitant, individuals like Philip Seymour Hoffman, who failed to update his will and develop an effective estate plan, could lose millions.

Life insurance is so important that even billionaires have it. While most of us are not billionaires, we want our loved ones to be cared for after we pass. That’s why most of us look for affordable life insurance. To do this, call an insurance agency to work with a reputable insurance agent. This person will help you go over affordable quotes, comparing cost vs coverage when it comes to affordable life and health insurance. Consider bundling your life insurance policy with existing policies under the same carrier for maximum savings on your premiums.

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Also, ask your friendly agent about all plan insurance or an all in one insurance plan. Insurance coverage isn’t just for the rich. Every one of us should have our health and our lives insured for ourselves and for our loved ones. Adding life insurance to your collection of policies is a smart investment in the future and gives you peace of mind.

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