Do high net-worth individuals need life insurance?

Life insurance, as well as many other forms of insurance, can be beneficial for those with a high net worth.

Life insurance provides a cash lump sum pay out to your loved ones should the worst happen to you.

If you’re a high net worth individual (HNWI) then protecting your assets for the benefit of your loved ones can be a key consideration. Life insurance can help you to ensure that they can continue living their current lifestyle with minimal financial disruption.

There’s also a range of insurance products for high net worth individuals (HNWI) known as ‘high net worth insurance’ to help you protect other aspects of your life. This isn’t something currently offered by Reassured.

Reassured can help you to secure a life insurance policy with a sum assured of up to £1,000,000.

We can also help you to secure multiple policies to provide multiple pay outs to cover various aspects of your life.

This article will look into why high net worth individuals need life insurance, how much it costs and much more, so keep reading…

Why do high net worth individuals need life insurance?

Due to having a lot of high value items, including property and possessions, those with a high net worth are likely to benefit from having life insurance in place for two main reasons:

  1. Help your loved ones continue their current lifestyle
  2. Help loved ones to pay off inheritance tax fees without dipping into their own funds

While you’re alive, everything you own, properties, money and possessions make up your estate.

When you pass away, your beneficiaries or next of kin will receive your estate.

In the UK, inheritance tax is charged at 40% on anything above a £325,000 threshold. As a high net worth individual it’s likely that your estate would well exceed this threshold.

By taking out a life insurance policy, you can write the policy in trust which can detach the policy from your estate, which means your loved ones won’t need to pay inheritance tax on the pay out.

This way your loved ones can receive a full pay out which can be used to help them cover the inheritance tax that will likely be charged on your estate, rather than them having to fund this personally or claim the funds from the estate.

Any additional funds can be put towards living costs or paying for your funeral.

Reassured offer a FREE trust writing service with the majority of the policies we sell. Simple speak to a friendly member of the team and they’ll be happy to help you through the process.

What is high net worth insurance?

High net worth insurance refers to a group of insurance products taken out by high net worth individuals to protect their possessions and assets.

Policies will often cover multiple areas of protection, such as:

  • Home insurance
  • Contents insurance
  • Travel insurance

By covering these aspects of your life, your assets can be protected while you’re at home and while you’re away.

Unfortunately, ‘high net worth insurance’ often doesn’t include life insurance and isn’t something we can currently provide at Reassured. So you’ll need to purchase an additional life insurance policy.

Why not use Reassured to compare quotes from some of the UK’s best life insurance providers to help you find the right policy to meet your needs.

What does high-net worth life insurance cover?

Life insurance can be used by those with a high net worth to cover many aspects of your life so these expenses are taken care of for your loved ones should you pass away. This can include:

  • Mortgage(s)
  • Rental payments
  • Loans and outstanding debts
  • Daily family living costs
  • Children's education 
  • Funeral costs
  • Cover inheritance tax

If your loved ones were to fall on hard times financially after your passing, would they face the tough choice of having to sell off assets in order to find funds to continue living their current lifestyle?

Thankfully, a life insurance pay out can provide the funds to take care of many important expenses, as well as providing funds to pay off any hefty inheritance tax bills.

This can help to minimise financial stress for your loved ones at an already stressful time.

Why not speak to an expert about protecting your loved ones? A friendly member of our team can provide you with information you need to make a fully informed decision.

Who qualifies for high-net-worth life insurance?

Your net worth is the sum of all of your assets, minus any liabilities. This includes:

Current value of your homeCredit card debt
Any other properties in your nameStudent loans
Vehicles (not including those on lease)Car finance
Bank accountsAny outstanding mortgage payments
StocksAny other loans
Household items
Any other assets of value

Since 2016, HMRC has defined a high-net-worth individual as anyone with assets in excess of £10 million.

In terms of life insurance, there’s no set definition of a high net worth individual.

What life insurance options are there?

There are multiple life insurance options available, each suited to protecting different aspects of your life. These include:

  • Level term life insurance
  • Decreasing term life insurance
  • Whole of life insurance

You can also layer additional policies for an extra financial safety net, such as:

  • Critical illness cover
  • Terminal illness cover
  • Income protection

Let’s look into these policy types in more detail…

Level term life insurance

Level term life insurance provides cover for a specified period of time (often this can be up to 40 years) and can provide a fixed pay out of up to £1,000,000.

A pay out will only be issued to your loved ones if you pass away during the term of the policy.

Due to the large pay out potential, level term life insurance is well suited to protecting large debts, such as an interest only mortgage, as well as protecting future family living costs.

Decreasing term life insurance

With a decreasing term life insurance policy, you’ll be covered for a specified period of time (up to 40 years) and your sum assured will reduce over the lifetime of your policy.

While you can choose a sum assured of up to £1,000,000 this will decrease over time.

If you have any loans in place that are likely to reduce over time, such as a repayment mortgage, securing a decreasing term policy can be ideal for protecting these.

As with a level term life insurance policy, your loved ones will only receive a pay out if you pass away during the policy term.

Whole of life insurance

Whole of life insurance provides lifelong cover and guarantees your loved ones a pay out when you pass away.

With a whole of life policy it’s possible to secure a pay out amount of up to £1,000,000.

Whole of life insurance can be an ideal option for high net worth individuals to guarantee their loved ones an inheritance after their passing and ensure that essential costs are taken care of.

Critical illness cover

Critical illness cover can be added to a life insurance policy for an additional fee.

It will allow you to make an early claim on your life insurance policy if you’re diagnosed with a life changing (but not life threatening) illness that’s listed within your policy.

The pay out can then help you to pay for medical bills, make necessary adaptions to your home or pay for carers.

Terminal illness cover

Terminal illness cover comes at no extra cost with all term policies taken out through Reassured.

It provides the opportunity for an early pay out if you’re diagnosed with a life-threatening illness and predicted to pass away within 12 months.

The funds can then be used to cover any private medical fees, help you get your financial affairs in order, or you could spend the funds enjoying time with your loved ones.

Income protection

Income protection will pay out a percentage of your usual income, in monthly (tax-free) instalments, in the event you become too ill or injured to work.

Income protection for high-net-worth clients can have some complications.

Firstly, those with a high net worth often have multiple sources of income and may be required to pay various taxes, which make it hard for income protection to be calculated accordingly.

Secondly, most standard income protection policies often have a maximum monthly benefit amount which may not come close to the amount needed for a high net worth individual.

However, some providers, such as Zurich, offer to pay out up to 80% of your annual net earnings up to a maximum of £20,000 per month. (This information has been taken from Zurich’s website and is correct as of 26/08/21).

This makes comparing income protection quotes essential to find the right level of cover to meet your needs.

Reassured Advice can secure income protection quotes from Zurich, as well as all of the UK’s other leading providers, to help you find the best policy.

It’s not always the case of one policy or another, if you have different areas of life you’d like to protect, it’s completely possible to secure multiple life insurance policies.

For example, you could take out term life insurance to cover any mortgages you may have as well as a whole of life insurance policy to guarantee your loved ones a pay out that can be used to cover inheritance tax on your estate.

Why not speak to Reassured to find your ideal life insurance solution?

AIG high net worth life insurance

AIG are one of the UK’s leading life insurance providers and they offer a life insurance option specifically tailored to high net worth individuals.

This offering allows high net worth individuals to secure a higher level of cover than is typically offered to standard applicants.

As a high-net-worth applicant you’ll be referred to AIG’s premier service team and through their specialist product, you can secure up to:

  • £100 million level term cover
  • £52 million whole of life cover
  • £3 million critical illness cover

To qualify for this policy you must meet one of the following requirements:

  • Annual premium of £12,000
  • Life cover sum assured at least £10 million
  • Critical illness cover sum assured at least £2 million
  • High status client
  • Complex business protection case

This is something that can only be purchased through an AIG advisor and unfortunately is not something that we can offer at Reassured.

This information has been taken from the AIG website and is correct as of 26/08/21. This information is subject to change

How much is high net worth life insurance?

The amount you pay for your premium is decided by the insurer during the application process and will be calculated using key information. This includes:

  • Your age
  • Your smoking status
  • Medical history
  • Weight/BMI
  • Policy type
  • Cover amount (sum assured)
  • Policy length (term)

Collecting this information allows insurers to determine the level of risk you’ll likely pose and your life insurance premium is calculated accordingly.

The older you get, the risk you pose increases, so securing cover at a younger age can help you lock in a more favourable premium.

Below shows the price breakdown of how much £1,000,000 (the maximum level) of cover would cost at each age.

These quotes are based on a non-smoker in good health, for a level term policy over a 20-year term:

AgePremium price for £1,000,000 of cover

Comparing quotes can help you to find the most favourable premium on a policy that meets all of your needs.

Is life insurance calculated in net worth?

No, life insurance isn’t calculated using your net worth. Instead the amount of cover you require can be calculated by adding together the sum of the expenses you’d like to cover.

How much cover you require can be calculated by adding together the sum of the expenses you’d like to cover, as well as any essential assets.

How much life insurance do you need?

Enter your financial commitments to understand the level of high net worth life cover you need.


£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.


According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.


The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.


You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.


According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.


If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.


Your total cover estimate

£ 0

Let us help you find your best quotes

What are the tax benefits of life insurance?

Those with a high net worth may experience the following tax benefits in terms of life insurance:

  • Avoid/minimise 40% inheritance tax for your loved ones
    As someone with a high net worth, it’s likely you have a large sum of property and possessions that make up your estate. When you pass away, 40% inheritance tax will be charged on anything over the £325,000 threshold. By writing your life insurance policy in trust, the pay out can become detached from your estate, ensuring that your loved ones receive a full pay out. The funds can then be used to pay off any inheritance tax fees on your estate so your loved ones don’t have to use their own money or claim money back from the estate.
  • Pay for life insurance through your business
    If you’re a high net worth individual who owns a business, it can be possible to claim your life insurance as a business expense allowing you to benefit from tax relief. This will only be possible through a relevant life insurance policy, rather than an individual policy. Unfortunately, we can’t currently secure relevant life insurance policies at Reassured.

Speak to a friendly member of the team about writing your policy in trust, we have a dedicated team who will be happy to help you through the whole process.

Compare life insurance for high net worth individuals

Comparing life insurance quotes is the best way to secure the right policy to meet your needs.

By taking out cover through Reassured, we can help you to secure a policy with a pay out amount of up to £1,000,000.

We can provide you with all the information you need to make a fully informed decision.

We also have a dedicated team who can help you to write your life insurance policy in trust, free of charge, so your loved ones can avoid/minimise 40% inheritance tax.

The best part is, we don’t charge a fee for our quotes, so why not get in touch?

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