Why Do Wealthy People Buy Life Insurance? 
Wealthy people buy life insurance at far higher rates than one would expect . That is because of the tax advantaged nature of life insurance . Because it is protected from income tax , the wealthy can count on that sum of money to be there in full to pay inheritance taxes , estate taxes , and the cost of settling their estates . They can pass money to their heirs or charity , income tax free . They may purchase life insurance on parents or grandparents so that they can afford to buy the family business when the owners die . Or on themselves , so that they families continue to receive an income when they pass . Not only is the money tax advantaged , but the death benefit has the potential to provide far more to the beneficiary than what the insured person paid in . For this and numerous other reasons , life insurance is a part of the financial portfolio of many a wealthy person . 