What the heck is life insurance? Wouldn’t it be more accurate to call it death insurance?
Well, to begin with, who would want to buy death insurance? But the life and death aspects of the business can be argued to be as much about the lives and assets that a person who dies is protecting with the insurance, and not really about his or her own life.
One of the things that is not debatable is that life insurance participation rates in a society grow as people accumulate more wealth/assets. Whether these are represented by the modest assets of a blue-collar family, the more substantial assets of the middle class, or the very large assets of the high-net-worth (HNW) and ultra-high-net-worth (UHNW) clients The Unger Company serves. Everyone is protecting something.
Life insurance, in its modern form, dates back to 16th century England, when the first policy of its kind was issued. Not so modern, I guess. However, the roots of life insurance date back to burial societies in the Roman Empire. Everyone in a society would contribute to the burial costs of their colleagues, a matter of honor among Romans, and that would work out pretty well for everyone except for the family of the last “guy” alive. His family would have to foot the entire bill. Talk about drawing the long straw!
When thinking about life insurance, it should be understood as a contract obligating the insurer to pay a benefit to a beneficiary at the time of the insured’s death. In our business, we are utilizing insurance for a variety of reasons, but one of our goals is to use insurance proceeds as a counterweight to taxes of the HNW and UHNW clients. So, at its most basic level, our business is about protecting assets from a fire sale by using insurance to compensate a family for paying estate/death taxes.
To accomplish this goal, The Unger Company employs many different strategies, types of coverage and premium payment methodologies. Clients may be familiar with some of the terminology such as term insurance and permanent insurance. But that just scratches the surface. We do not represent a single insurance company, nor do we advocate for any single type of insurance, rather we construct a “bespoke policy or series of policies” for our clients based upon their needs, disposable income and/or their ability to finance the coverage.
While this is a very superficial explanation of insurance, we hope that it provides you with a little context for why insurance is important, especially if you and your family are wealthy enough to surpass the 2023 federal estate tax exemption of $12.92 million or are a “tween” More about “tweens” in a later “dive”.
The Unger Company, Ltd. is among the most distinguished and exclusive firms of its kind, building elegant and effective estate tax plans for the high-net-worth classes during five decades in business. We have an uncommon level of experience and know-how in this highly specialized business. The firm was founded by Harold Unger in 1974 and he remains an active thought leader in this industry. Contact us through our website or call us at 212-755-4777 to learn more about how we can help you.
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Harold Unger LinkedIn: https://www.linkedin.com/in/harold-m-unger-9453aa73/
The Unger Company Ltd. LinkedIn: https://www.linkedin.com/company/93617123/
The Unger Company, Ltd. does not seek to practice law for clients and these published items are intended only to be informational in nature.
