Wednesday, October 6, 2010

Why rich people buy insurance?

Insurance is a financial tool. Rich people tend to get rich, by using financial tools. 

  • They don't really BUY life insurance for income replacement, they make use of life insurance as "Wealth Transfer" tools.
  • They'd rather pay a fixed $300 a month for their health insurance, than risk a possible five to seven figure health condition.
  • That's what money management is all about. They don't need it, they just want it.
Read this article here, from WSJ.