Premium Life Insurance Calculator
Calculate premium life insurance costs for high-net-worth individuals. Estimate whole life, universal life, and ILIT-owned policy premiums.
Term vs. Permanent Premium Comparison
Compare annual premiums for term life, whole life, and universal life insurance.
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Estate Tax Liquidity Need
Calculate how much life insurance you need to cover estate tax liability.
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ILIT Premium & Gift Tax Analysis
Calculate annual premium gifts to an ILIT and gift tax implications.
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Formula
Insurance Need = (Estate Tax Liability - Liquid Assets) | Annual Premium = Death Benefit x Rate Factor (age, health, type)
Frequently Asked Questions
How much does a $10 million life insurance policy cost?
Term life: $5,000-$15,000/year. Whole life: $80,000-$150,000/year. Universal life: $40,000-$80,000/year for a healthy 40-year-old.
Why do wealthy people use life insurance in estate planning?
Life insurance provides liquidity for estate taxes, funds buy-sell agreements, creates tax-free wealth for heirs, and when held in an ILIT, excludes proceeds from the taxable estate.
What is an ILIT and how does it save taxes?
An ILIT owns the policy outside your estate, so death benefits pass free of both income and estate tax. Without an ILIT, a $10M policy could lose $4M to estate tax.
Understanding Premium Life Insurance
For high-net-worth individuals, life insurance serves as a critical estate planning tool rather than simple income replacement. Large policies ($5M+) require careful structuring to maximize tax efficiency and are often held in irrevocable trusts.
Policy Types for Wealthy Individuals
- Survivorship (second-to-die) policies are the most common for estate planning, as estate tax is due when the second spouse dies
- Private placement life insurance (PPLI) allows tax-free investment growth inside an insurance wrapper
- Guaranteed universal life provides permanent coverage at lower cost than whole life