LI Firm Breaks World Record For Life Insurance Policy

A New York based insurance advisor has sold an insurance policy to an “entertainment industry figure” that tops the amount listed by Guinness World Records by nearly $100 million, records show. The Archer Financial Group, which specializes in life insurance for the wealthy, was contacted by Guinness last week to start the process of updating the record.

Guinness World Record lists $201 million as the “most valuable life insurance policy” sold, but Tom Archer surpassed that amount with policies with payouts of $235 million-dollar and $295 million-dollar.

Dovi Frances, managing partner of Santa Barbara, California based SG LLC, holds the record for the sale to someone in the Silicon Valley area “known in the technology space.” The combined death benefit topped the $100 million record held by the 1990 sale of a policy by Peter Rosengard in the United Kingdom to an “entertainment industry figure” in the United States.

The policies in all these cases include numerous insurers that add up to one combined death benefit by combining the policies of various carriers. “You can’t get it from one carrier,” said Tom Archer. “It’s always got to be split.”

The biggest policy went to someone in the entertainment industry. The second biggest policy, he said, went to someone in the real estate industry.

Archer sold the biggest policy in 2014 and it has a $14 million-dollar annual premium, a $295 million-dollar death benefit and was spread out between 11 insurers “They told me this is the largest insurance policy written,” Archer said of the insures, even before Guinness contacted him.

Wealthy individuals sometimes use life insurance to pay estate tax, which kicks in at $10 million. They do it, in part, so that heirs aren’t forced to sell assets, which can include real estate. “To pay estate tax”, Archer said when asked for the motivation for the policy. “Anybody who has an estate worth a lot of money, over $10 million, might have a problem.”

In order to obtain this much life insurance, an individual also has to provide extensive medical documentation to insurers. “They’re happy to have them, if the people are healthy,” Archer added. “They go over you with a fine-tooth comb.”

He still doesn’t believe the record will be beaten that easily, in part because it’s difficult for an individual to get this much insurance. “I don’t think so,” Archer said. “They’re crunching down. That’s about as high as you can get.” He said his client would have bought more insurance, but took the biggest amount he could obtain. Topping the record would require not only a willing client, but insurers who agree to provide the policies. “They maxed us out at $295 million,” Archer said. “I can’t predict what’s going to happen in the future.” He said, “Records were made to be broken, although that doesn’t mean doing so is easy. That’s why they keep records in baseball, stolen base records, home run records,” he added. “To raise the bar.”

May 17th, 2016