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FAQs

Life Insurance - Why do the rich buy insurance?

a. Because they want to equalize the assets between their multiple children, so they use insurance as a way to equalize assets.
b. They use it as a cash flow for the next generation. You see, a lot of families are asset rich, liquid poor. They want to ensure that the next generation is not forced to start selling assets in distress.
c. Insurance is an asset on their balance sheet, which is not market-related, so it has zero correlation to markets, which means it always holds value. That's why its a fantastic way to diversify the risk.