A mystery billionaire’s life insurance policy is one for the record books.
The $201 million policy has been deemed the world’s most valuable life insurance policy by the Guinness Book of World Records, The Associated Press says. It’s more than double the $100 million policy sold in 1990 to Hollywood tycoon David Geffen.
An insurance policy that big comes with a hefty price tag – premiums are reportedly in the single-digit millions a year.
The deal – which took seven months and involved 19 insurance companies – was negotiated by financial adviser Dovi Frances, head of Santa Barbara-based S.G. LLC, AP says.
Frances told the AP that the buyer, a well-known California tech billionaire, prefers to stay anonymous for more than just privacy reasons. “He wants his next of kin to keep working hard,” Frances said.
Why would a billionaire need such a big life insurance policy? According to Forbes, it comes down to avoiding taxes:
“In California, there are state death taxes that are exceptionally high,” explained Frances. “If your properties are leveraged, then those loans are called immediately and need to be paid off. So if you want to head yourself against such a risk [your beneficiary] can receive the proceeds [from life insurance] without being exposed to taxes.”
Good luck trying to identify this world-record-holding Silicon Valley billionaire. Forbes said California is home to 111 billionaires, more than a third of them considered high-tech investors.
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