Billionaire buys $201 million life insurance policy

Written By limadu on Senin, 17 Maret 2014 | 15.30

NEW YORK (CNNMoney)

Guinness World Records, which announced the policy, said it is the largest ever issued.

Neither the record keeper nor the issuer would say who is covered by the massive policy.

Dovi Frances, the adviser who arranged the policy, would only say it went to a well-known technology billionaire from California.

Related: How to choose a life insurance policy

The wealthiest of the wealthy buy life insurance for several reasons.

Primary among them are tax purposes, Frances explained.

A wealthy estate is hit with a hefty tax bill, and there may not be enough cash to cover it, since many millionaires and billionaires hold their wealth in investments, he said.

Related: The ultimate guide to retirement

The $201 million policy is more complicated than most. It's underwritten by 19 different insurance companies, each with a slice of less than $20 million, he said. If a single lender took the whole policy, Frances said, "they would go into bankruptcy if the insurance policy is called."

And a big plan comes with a big cost. Frances said the price is "in the low single-digit millions."

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First Published: March 16, 2014: 5:21 PM ET


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