Best Life Insurance for High-Net-Worth Individuals | SelectQuote (2024)

FAQs

What type of life insurance do wealthy people buy? ›

Cash value life insurance (also called whole life insurance) is a great form of life insurance for wealthy individuals. This type of policy provides a way to have tax-deferred savings, especially if you've maxed out other retirement accounts.

It may seem that because they have significant wealth, they don't have to rely on insurance to provide a payout for their beneficiaries after they pass. However, even for those with significant savings, life insurance remains a crucial financial tool.

An investor with less than $1 million but more than $100,000 is considered to be a sub-HNWI. The upper end of HNWI is around $5 million, at which point the client is referred to as a very-HNWI. Ultra-high-net-worth individuals (UHNWIs) are defined as people with investable assets of at least $30 million.

Indexed universal life (IUL) insurance offers several compelling advantages for estate planning: Large, Tax-Free Death Benefit: The money paid to your beneficiaries is generally tax-free, allowing for the efficient transfer of a greater portion of your wealth.

Life insurance is a popular way for the wealthy to maximize their after-tax estate and have more money to pass on to heirs. Life insurance can also be used as an investment tool with tax benefits when you're still alive.

You need more money than ever to enter the ranks of the top 1% of the richest Americans. To join the club of the wealthiest citizens in the U.S., you'll need at least $5.8 million, up about 15% up from $5.1 million one year ago, according to global real estate company Knight Frank's 2024 Wealth Report.

Wealthy individuals often invest in rich people insurance or high-net-worth insurance to safeguard their assets comprehensively. Chubb, State Farm, and Auto-Owners excel in high-net-worth auto insurance, offering specialized coverage and tailored solutions for affluent clients.

If you're in the upper class, you're sitting pretty. The top 10% of earners have an average net worth of $2.65 million. Even if you're squeaking into the upper class (the 80-90% range), you're looking at about $793,000.

Can I get a million dollar life insurance policy without a medical exam? ›

A no-exam policy is possible for up to $3 million. Low average term life insurance cost among the companies we analyzed. Offers especially low rates for $1 million term life insurance.

Answer: Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received.

Millionaires can insure their money by depositing funds in FDIC-insured accounts, NCUA-insured accounts, through IntraFi Network Deposits, or through cash management accounts. They may also allocate some of their cash to low-risk investments, such as Treasury securities or government bonds.

Whole life insurance can avoid taxes by building cash value. Your cash value savings grow tax-deferred, so you don't owe income tax as long as you leave the money in your account.

Keep in mind that the best life insurance to build wealth is typically a whole life policy or a permanent life policy.