A woman expresses concern over her mother’s $600,000-per-year life insurance premium, calling it excessive. Financial advisors on The Ramsey Show suggest that for high-net-worth individuals with complex estate planning needs, such a cost may be warranted. The discussion highlights the growing use of large permanent life insurance policies as wealth preservation tools.
- One client pays $600,000 annually for a $50 million life insurance policy
- The premium represents 1.2% of the policy's face value
- The policy is structured as a permanent life insurance product with cash value accumulation
- Used for estate liquidity, tax mitigation, and intergenerational wealth transfer
- Typical among ultra-high-net-worth individuals with complex financial planning needs
- Premiums in this range are not uncommon in specialized permanent life insurance markets
A Florida resident recently voiced concern over her mother’s $600,000 annual premium for a single life insurance policy, questioning whether the expense constitutes financial overreach. The mother, a business owner with significant liquid assets and family trusts, relies on the policy as a central component of her estate plan. The policy’s structure includes a $50 million face value, with cash value accumulation and estate liquidity provisions. Financial experts on The Ramsey Show noted that while the $600,000 annual cost is exceptionally high—far above typical life insurance expenditures—it aligns with strategic financial planning for individuals managing multi-generational wealth. They emphasized that premiums in this range are not uncommon for indexed universal life (IUL) or variable universal life (VUL) policies used in asset protection and tax-efficient inheritance strategies. The $600,000 figure represents approximately 1.2% of the policy’s $50 million death benefit, a rate consistent with high-coverage, long-term permanent insurance for ultra-high-net-worth clients. Such policies can provide liquidity to cover estate taxes, which in 2026 exceed $13 million per individual, and help prevent forced asset sales. Advisors also cited the policy’s cash value component, which grows tax-deferred and can be accessed through policy loans without triggering taxable events. Market implications are limited to niche financial advisory services and life insurance underwriting, particularly in the premium segment of the permanent life insurance market. Institutions offering these products, including specialized carriers and wealth management firms, may see increased demand for high-coverage solutions among affluent clients seeking to preserve wealth across generations.