The answer to this question isn’t clear cut, but there are some general guidelines to follow. Most important of all is that you should only buy life insurance to protect against financial hardship after death. If you have millions or even billions of dollars in the coffers, and you think that this money is sufficient to provide for your family if you were to die, then you do not need life insurance. On the other hand, if you are a millionaire but your family’s standard of living depends on your continuing to work, then you should get life insurance, since your income won’t be around after you’ve passed away.

The good fortune of being worth millions at any age should not be put to waste by poor financial planning. Life insurance assures that no spouse, child or any loved one suffer financially after the death of an individual. It is such a tragedy for families to lose everything including the lifestyles that the family has been accustomed to when the breadwinner fails to buy life insurance or purchases too little. The proceeds of the life insurance can also be used to help pay estate taxes so it need not be taken out of the inheritances of the heirs.

Most millionaires are not the limo-riding, mansion-living celebrity type since such status has been attained by those working hard and steadily saving money all their lives. The relentlessly booming economy has created unprecedented wealth, along with a number of people with sizeable estates. However, millions worth of assets could very well mean estate taxes at the death of the owner.

Under the present estate tax laws, a portion of the estate can be transferred tax-free to heirs upon death. When an estate exceeds a certain amount, estate taxes become due. The bigger the estate, the bigger the tax bite. It could be as high as 55% at the top level. The entire estate can also be transferred to the spouse upon death if exclusion is not met provided the spouse is a US citizen. The estate will be subject to estate tax at the spouse’s death but heirs will get hit by the estate tax bill.

In a scenario like this, a family business worth millions of dollars built from scratch by a married couple would entail at least a million dollars for estate tax once the business in inherited by the children. There are even instances where the heirs are forced to sell all or a portion of the business just to pay the taxes. Estate transfer taxes can sometimes cause the failure of family businesses to make it to the next generation.

In a recent survey of “high net-worth individuals” or those worth more than $1million dollars in assets, exclusive of the home and above and beyond debts, some interesting data has been found out. The survey showed that 47% plan to consult a financial adviser about estate planning, 41 % plan to leave existing trust funds in place, 33% plan to either increase or maintain their plans for charitable giving, 33 % plan to either increase or maintain their plans for tax advantaged giving to their children, 26% will leave existing life insurance policies in place and less than 5% plan to drop life insurance, terminate their trusts or decrease their giving to charities or children.

Millionaires tend to be above average when it comes to planning for the future and it might be wise to follow their lead when it comes to life insurance. The bottom line, though, is to get life insurance online in the case that you feel that your current assets are not sufficient to provide for your family into the future.

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