All-Time High Life Insurance Policies
The world record for the largest life insurance policy has just been broken. According to Guinness World Records, the previous all-time high for a policy was $201 million. That was until The Archer Financial Group sold policies worth $235 million and $295 million. The insurance company quickly contacted Guinness to start updating the record, providing documentation as evidence of the massive transaction.
Selling a life insurance policy worth hundreds of millions of dollars is no easy feat. Such a policy could be a financial burden to an insurance company when it comes time to pay the beneficiary. The Archer Financial Group signed the policies with the help of several reinsurance companies. The policies are actually a combination of different policies from different carriers. This helps the insurance company hedge its bets, relying on multiple partners to help shoulder the load.
While these policies might be the largest on record, the insurance industry is no stranger to massive payouts. There have been dozens of other policies worth hundreds of millions of dollars. Another previous Guinness world-record holder was a 1990 life insurance policy sold to a US entertainment figure.
Of course, the average individual does not need hundreds of millions of dollars in coverage. When calculating how much a life insurance benefit to purchase, one should consider how much money their loved ones will need after they’re gone. Life insurance policies should minimally cover end-of-life expenses including funeral costs and legal fees. Policy death benefits are also commonly used to pay off the family mortgage or to leave something behind for future generations.
Tips for Calculating Life Insurance
Most policies are based around four key financial concerns: debt, income, mortgage and education. Policyholders should factor in how much debt their family still owes including credit card debt, student loans, car payments, and the family mortgage. Individuals should also look at how much their family will need to support themselves in the years after their death. A good rule of thumb is to multiply the household’s current income by the number of years it will take the family to get back on their feet.
Policies should also factor in the cost of sending future generations to college. The College Board currently estimates that the average four-year college degree costs $32,405 per year for private college, $9,410 per year for in-state public college, and $23,893 per year for out-of-state public college.
Adding up all of those expenses can lead to some overwhelming numbers and doesn’t even cover unexpected expenses, future medical bills, emergency funds, or inflation. Policyholders should consider adding more coverage to their policy to air on the side of caution.
Get a Quote Today
Understanding how much life insurance coverage you need can be tricky. It’s important to do your research and compare quotes from top-rated life insurance companies to make sure you can get the best coverage, for the best price. Get started with the online life insurance quote tool at LifeInsure.com today or call us at 866-691-0100.