Really? Who says rich people don’t need life insurance? Would it surprise you to know that wealthy people are some of the biggest buyers of life insurance in the world. Would it shock you to know that they even borrow money to buy huge amounts of life insurance for tax reasons? Maybe they know something that the average person does not.
For most people life insurance buys peace of mind for their family’s future… to help pay funeral costs, or make sure a spouse can pay off the mortgage and fund their children’s college education. Simple but critically important needs so that the family does not go into financial ruin. The other good news is that the death benefit from that life insurance policy is generally tax-free to your beneficiaries.
But for people who make the big bucks— who can afford to pay for all those fancy financial advisors— the stakes are much higher. The wealthy figure that if they were smart enough to make it, they should be smart enough to keep it. Call it rich man’s wisdom: How to be rich and how to stay rich.
The wealthy usually own whole life insurance policies, also called cash value life insurance. These policies accumulate a cash value, and as long as you do not withdraw that cash, this value can grow tax-free until you withdraw it. If you wait until retirement to receive it you will likely be in a lower tax bracket so you will keep more of your investment.
One thing you can be sure of is that the wealthy HATE to pay tax. Especially after they’ve accumulated wealth and paid tax their entire life, it really irks them to know that if they die and leave it to their children their kids will pay big taxes to get it… in their minds it’s like letting the government double-dip!
This is not my viewpoint… it’s just the way it is. There’s been a lot of controversy over the estate tax issue in recent years, the same type of controversy you see between political parties. You can’t control whether or not to pay tax but you can literally buy those tax ringgit, often for sen on the ringgit, through the use of life insurance.
So, granted none of the heirs of wealthy people are likely to be in the poor house, but they sure don’t want to bequeath that money to the government if they can avoid it. That is why they have learned how to use life insurance for a fraction of their own hard-earned dollars.
You might not have millions of dollars in the bank but you should learn about the power and value of life insurance for your own financial picture. Take a couple of minutes to save some money by getting a FREE life insurance quote now…it is more affordable than you think.
Your financial statement might be more modest but your desire to protect your family’s future is the same as that of a rich man’s. What do you think? We’d love to hear your thoughts on death (regarding life insurance of course) and taxes. Your turn to jump on the soap box!
