Life Insurance for High-Net-Worth Individuals

Life insurance for high-net-worth individuals work the same as others but with more opportunities to invest. Individuals with a high net worth can take advantage of wealth-building opportunities such as cash flow banking with permanent life insurance policies. Of course, term life insurance is available for high net worth individuals, but it comes with fewer perks. Shop around and compare multiple companies and find the best life insurance quotes for high-net-worth individuals.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Jul 19, 2021

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Quick Facts

  • High-net-worth individuals have more investment options than the average person.
  • Term life insurance is much cheaper than permanent life insurance, but it comes with fewer perks.
  • Use cash flow banking and save money on personal finances.

Life insurance for high net worth individuals is more of an investment than an expense. High net worth life insurance has an opportunity to grow into wealth depending on the life insurance policy. So what policies will you need as a high-income-earning individual?

Besides, high net worth insurance (HNW insurance), permanent life insurance is ideal for those who earn higher than the average employee in the United States. Continue through this guide to learn about life insurance and the net worth of high earning individuals.

If you’re looking for life insurance rates for high-net-worth individuals, enter your ZIP code in the FREE comparison tool above. Which life insurance company for high-net-worth individuals is best for you? Find out now.

What type of life insurance should high-net-worth individuals buy?

People who earn higher-than-average income have a lot of financial freedom. Therefore, they can select any life insurance policy they want. Whether you make a high or low income, you’ll need to do some research before buying a life insurance policy.

We’ve done some of the research for you. Go through the subsections below to learn more about different types of life insurance.

Term Life Insurance

Under term life insurance, you’ll have life insurance coverage for a specific time. That could be 10 years, 20 years, etc. Most life insurance companies will present terms in different packages.

Each specific period carries special life insurance rates. The longer the term life period, the more you’ll pay for life insurance.

Let’s look at the term life insurance average cost.

Average Monthly 10-Year & 20-Year Term Life Insurance Rates w/ a $250,000 Coverage Amount
Age and Gender$250,000 Policy Average Monthly 10-Year Term Life Insurance Rates$250,000 Policy Average Monthly 20-Year Term Life Insurance Rates
20-Year-Old Male$13$17
20-Year-Old Female$11$14
25-Year-Old Male$13$17
25-Year-Old Female$11$14
30-Year-Old Male$13$17
30-Year-Old Female$11$14
35-Year-Old Male$13$19
35-Year-Old Female$12$17
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When you finally pick a life insurance term, you can decide the coverage amount of your death benefits. You can request more death benefits but expect your life insurance rates to increase per month.

After a term life insurance period ends, you will lose your policy’s death benefit and cash value. If you want something back from a term life insurance policy, enroll in return of premium life insurance.

Permanent Life Insurance

With permanent life insurance, you’ll pay for life insurance coverage your entire life. It’s more expensive than term life insurance quotes but has more perks. In addition to death benefits, permanent life insurance carries savings and investment opportunities.

Whole Life Insurance

One of the best permanent life insurance policies is whole life insurance. It comes with death benefits, savings, and investment opportunities. Whole life insurance has fixed payments throughout the history of the policy, also.

Universal Life Insurance

On the other hand, universal life insurance only provides death benefits and savings. There won’t be perks for investment opportunities. However, the premiums you pay per month are more flexible.

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Who are the best high net worth insurance companies?

Now that you know what life insurance policies are available for high net worth individuals, let’s look at the top 20 companies in the life insurance industry.

Top 20 Whole Life Insurance Companies by Market Share
CompaniesDirect Written PremiumsMarket Share
Northwestern Mutual$10,517,115,4526.42%
Metropolitan Group$9,821,445,9536.00%
New York Life$9,925,848,3005.68%
Lincoln National$8,769,303,7745.36%
John Hancock$4,640,905,0172.83%
State Farm$4,633,004,9632.83%
Minnesota Mutual Group$4,422,100,0282.70%
Guardian Life$4,033,541,4012.46%
Pacific Life$3,755,606,2132.29%
AXA Equitable$3,051,945,8491.86%
Voya Financial$2,526,828,2681.54%
Brighthouse Financial$2,519,733,1161.54%
Protective Life$2,403,640,8251.47%
Sammons Enterprises$2,321,529,7221.42%
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It may seem like the market share percentages are low. If you think of the number of life insurance companies in the United States, you’ll see why these companies are considered the best.

These are some of the highest-grossing life insurance companies regarding direct premiums — the total premiums from customers.

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Are life insurance payouts to beneficiaries counted as taxable income?

According to the Internal Revenue Service (IRS), death benefits to beneficiaries aren’t included as taxable income. However, any interest you earned from life insurance premiums is considered taxable income.

How does life insurance help high-net-worth business owners?

Businesses that lose key figures at companies may need life insurance for companies and employees to continue. A high net worth individual can select business partners or any staff as a beneficiary. It may require the maximum death benefit, but the business can have expenses covered.

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How does life insurance protect your family?

The most important factor in life insurance is protecting your loved ones. Life insurance can add to your wealth and give more than enough financial help to domestic partners, spouses, and children.

Life insurance can protect your family from debts, funeral and burial costs, mortgage payments, and other expenses you were taking care of before you passed away.

How does cash flow banking with permanent life insurance work?

The excellent option with permanent life insurance is that you can use it while you’re living. A concept called cash flow banking (sometimes called infinite banking) allows you to borrow money against your death benefits.

In other words, you can get a loan from your life insurance company as long as it doesn’t exceed your death benefit amount.

High net worth individuals are more than capable of paying these loans back quickly. As you’re paying back your loan, the accumulated cash value gains interest.

If your permanent life insurance policy has a value of $75,000 and you borrow $10,000, you’ll earn interest on the $75,000 cash value.

See, cash flow banking doesn’t affect your death benefits or your savings. The loan is separate, and you can spend your entire life paying back a loan.

Why do high net worth individuals need life insurance?

Life insurance is a wise purchase for all individuals. Using life insurance to build wealth is one of the reasons you may want to invest in life insurance. Also, life insurance leaves a sizable cash value for beneficiaries.

Any wealth transfer to life insurance can last your entire life under permanent life insurance. Although it doesn’t protect assets like wealth insurance, life insurance protects your loved ones from debts and other expenses after you’ve passed away.

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Life Insurance for High-Net-Worth Individuals: The Bottom Line

Anyone in a high-income bracket should strongly consider life insurance. Term life insurance quotes are cheaper, but permanent life insurance is a better investment.

Using infinite banking concepts can maximize your relationship with your life insurance company, and you save money on personal finances and business expenses.

Ready to buy life insurance for high-net-worth individuals? Enter your ZIP code in the FREE online quote tool below to start searching for affordable life insurance for high-net-worth individuals.

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