Those who are comfortable with wealth may assume that they are protected due to their individual wealth, however, the reality is that a number of unseen costs can occur. Due to these unforeseen factors, it is beneficial to obtain life insurance to ensure the following areas are fully cared for
Liquidity and Leverage
Life insurance can provide the benefit of liquidity and leverage for those who you entrust your estate to. Liquidity can be easily accessed so that the trustee of the estate can promptly provide the assets needed and avoid selling off other assets.
Estate Taxes Payment
The relevant life ensures will ensure that there is a sufficient amount of liquidity to pay debts, facilitate a buyout (if needed) or pay federal estate taxes associated with the estate.
Continuity Business Succession Planning
Ensuring the continuity of a business is of high importance to high worth citizens, the strategy can use a life insurance policy to buy out a business. Often a buy-sell agreement funded by life insurance is used for this aspect. However, Family business succession planning can also be used, that allows close family members to obtain a deceased family member’s entity using the life insurance proceeds.
This type of coverage will work differently than a lump sum pay-out for family members, legacy payments will deposit a sum spaced out over time, the time frame can be specified, weekly, monthly, yearly etc. The benefit of this cover is that it could potentially lower the amount of taxes that your family would have to pay.
These are just some of the many aspects that must be considered for High Worth Citizens. It is clear that leaving your estate and business for loved and trusted ones is not as simple as it may appear. To give you and your family peace of mind it is vital to obtain the correct life insurance for you that covers high net worth citizens.