How much life insurance do high-net-worth individuals need?

Affluent Nevada families often discover they need more life insurance than they initially assume, not less. High-net-worth individuals face estate liquidity challenges: significant wealth may be held in illiquid assets—real estate, business interests, private equity—that cannot easily be sold to pay estate taxes or equalize inheritances without disruption.

Federal estate tax applies to taxable estates above the exemption threshold. Life insurance held in an irrevocable life insurance trust (ILIT) is excluded from the taxable estate and provides tax-free liquidity to pay those taxes without forcing the sale of family assets. This strategy can preserve millions in wealth across generations.

Additionally, high-income earners who have maximized contributions to 401(k)s and IRAs can use permanent life insurance's tax-deferred cash value as an additional accumulation vehicle with no contribution limits. Many professionals consider this an important complement to a comprehensive financial plan.

Coverage amounts for high-net-worth estate planning can range from $1 million to $20 million or more. Agents in our network work with carriers that specialize in large-case underwriting.