Rich people don’t think of life insurance the same as people with less money. It’s always good to explore options and even know how the better half also purchase life insurance to protect their families.
Responsible families want to ensure that their loved ones will be financially secure in the event that a primary breadwinner dies. This is why families rely on life insurance to make sure that their families will be able to carry on and not suffer a financial loss if one parent’s life is cut short.
How does life insurance work?
The purpose of
Typically, most families that are not wealthy and where parents are still young opt for term life insurance.
With term life insurance, it pays a benefit in the event of the death of the insured during a specified term. So, if one parent dies early within the term of the life insurance policy the family receives payment.
An alternative to term life insurance is whole life insurance, where premiums build cash value that can also be used later in life or that will add to the death benefit payout.
The reason being is that in the event of a tragedy such as a death, the permanent life insurance will pay off any debts, estate taxes and final expenses.
This is also the same type of life insurance policy that Kim Kardashian West has for her kids with husband Kanye West. The couple released their prenuptial agreement in March of 2014, this later became the blueprint for how to set up life insurance for the rich and famously fabulous.
At the time that the couple married, Kanye West had amassed fortune upward of $100 million dollars. Through the permanent life insurance policy, his fortune would then transfer to Kim in the event of his death. The
permanent life insurance policy holds a death benefit of $20 million and was purchased to offset any debts, estate taxes and final expenses.
This is how the rich protect their families in death. Having a permanent life insurance policy would protect the other party by covering offset of debts, including estate taxes, and final expenses. So, Kim would not have to deal with any of this during a tragedy.