Once you earn a high salary or inherit valuable property, you must protect your wealth with special insurance. One million dollars is considered the threshold of high net worth (HNW) from the perspective of the financial and insurance industries. You need to know here about high net worth insurance when you become a millionaire.
High net worth insurance is designed to financially protect individuals with a net worth of at least $1 million. About six million American households fall into this category. High-worth clients need customized insurance services and programs that protect specific assets.
There are several forms of insurance coverage available to high-net-worth individuals. The type of coverage you need depends on your lifestyle, belongings, and risks. Here are some of the plans to consider:
Your HNW policy is similar to a standard homeowners insurance policy because it provides several protections for your property. An effective strategy for protecting valuable property often involves a cost-effective, comprehensive policy with a high deductible. Your HNW policy includes Guaranteed Replacement Costs for the dwelling and other structures. Choose a cash settlement option for items that can't be replaced.
Some items categorized as "valuables" include art, jewelry, and expensive digital equipment. Certain valuables may require regular maintenance programs that collection management professionals offer.
Owning expensive property can make you a target of kidnappers and other criminals. Many HNW families buy kidnap and ransom insurance to pay for the various financial losses associated with these crimes. It includes paying medical bills for victims whom their captors harm. It can also deliver the ransom to return a loved one to safety.
Wealthy family members need protection from the trauma of criminals who try to rob them. Family protection coverage includes paying for relief from unwanted interactions such as cyberbullying, stalking, and assault.
If your family owns a privately held company, you can protect associated assets with family office insurance. Usually, the threshold for this type of coverage is if the company is valued at least $100 million. For families that have set up a trust fund, the key coverage to pursue is a family trust and trustee liability insurance.
As a millionaire, you might get sued for several reasons by people who are envious, jealous, or want to see you fail. Claims against HNW individuals tend to involve auto or watercraft accidents. They usually pay medical bills for bodily injuries. This coverage is included in a standard homeowners policy. HNW families tend to go for high coverage limits with policy extensions.
HNW individuals need to check for standard exclusions in personal liability policies. These exclusions include excess liability and factors affecting high net worth insurance costs. Another exclusion is intentional property damage by a family member while in the home.
The best way to protect millions of dollars is with high net-worth insurance. Many high-income earners buy various forms of customized HNW insurance, especially for rare, expensive items like paintings by famous artists. Contact us today at GrayStone Insurance Group to learn more about getting the right coverage to protect your high-net-worth.
