Life Insurance For Billionaires

Insuring billionaires comes with unique challenges because the coverage amounts are so large—sometimes reaching into the billions. Many billionaires use life insurance to help their heirs cover estate taxes without having to sell off businesses or assets. Since most insurance companies can’t take on that kind of risk alone, they rely on reinsurance to share the load. But even reinsurance can be tricky, especially if the payout is very large. Also, underwriting billionaires isn’t always easy because their high-end medical care may not include detailed health records, which insurers need to assess risk properly.

Another issue is something called moral hazard—when people take more risks because they feel financially protected. A billionaire with a big life insurance policy might be more willing to take part in dangerous activities or risky business ventures, knowing their family will be taken care of if something happens. To protect against this, insurers often raise premiums or add exclusions for high-risk behavior. Billionaires also tend to own unusual and hard-to-value assets like private companies, real estate, or art. These assets change in value over time, which means policies need regular updates to keep coverage accurate.

Wealth managers play a big role in helping billionaires with their insurance. Many don’t hold policies directly—instead, they use trusts or companies to protect their privacy and reduce taxes. Choosing who gets the payout can also be complicated, especially if there are multiple beneficiaries or special conditions. Premiums for these policies are high, but they’re customized based on the billionaire’s needs and risk level. Since things can change a lot over the years—financially or personally—insurance plans often need to be reviewed and adjusted. That’s why a team of experts is usually needed to handle everything smoothly.

For more information see Jerry D. Prince and Russ Alan Prince “Life Insurance For Billionaires,” Financial Advisor, March 24, 2025. 

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.