Why Rich People Like Donald Trump Need Life Insurance

13291209014_dd2fa0a2a2_nDonald Trump has come to represent the rich, successful person. I am not saying he is my personal role model. I also want my next president to be a constitutional conservative. Having said that, let’s talk about rich people needing life insurance.

It’s all about leverage

What makes people like Trump rich? A lot of it has to do with leverage. They can really stretch a dollar. They can allocate time, money, and other resources, and get the biggest bang for the buck. They get a lot of mileage out of publicity. They create huge organizations to do work for them, while they operate at their highest level. They invest their money so it makes money.

Paying off a business loan

Let’s suppose a rich person like Trump takes out a $10mil loan to capitalize a business venture. What happens if he predeceases the loan payoff? Should his business have to close down? No. They should buy life insurance. The benefit would pay the bank, so the business could keep growing.

Funding a buy sell agreement

Suppose a rich person like Trump takes on business partners. They form a buy sell agreement to properly pass on the shares of a deceased partner. If one were to pass away, should the company have to strip its cash reserves to pay off the surviving family member? No. They should buy life insurance. The benefit would pay off their surviving family member, so the business could preserve its cash.

Paying estate taxes

Now let’s suppose a rich person like Trump amasses a huge fortune. According to current estate tax law, both Uncle Sam and the state are going to want a huge portion of that money when it is passed on to the next generation. Should the family have to sell off properties, heirlooms, businesses, and other assets just pay these taxes? No. They should buy life insurance. The benefit would pay off the taxman, so the family could keep the estate intact.

Helping rich people stay rich

Every dollar of life insurance benefit literally cost pennies. This is a great example of leverage. Life insurance can help rich people stay rich.

Please feel free to comment, or to contact me directly with a specific question. If you need a quote now, or a second opinion on a quote you have received, the best thing to do is to call me toll-free at (866) 633-1818. Or email me at skobrin@stevenkobrin.com. I also encourage you to download my free Life Insurance Guide – see the above tab. Many people have found it to be extremely educational.

 

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