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Silicon Valley billionaire buys record life policy

Insurance files

SAN FRANCISCO (AP) - An unnamed Silicon Valley billionaire has purchased the world's most valuable life insurance policy.

The man who cobbled the deal together said Saturday that it took seven months and 19 insurance companies to put together a deal that surpasses a $100 million policy sold to Hollywood mogul David Geffen in 1990.

"No one company can afford to take a $201 million hit," said Dovi Frances, the financial adviser who represents who he calls a "well-known billionaire."

The Guinness Book of World Records announced the surpassing of Geffen's record on Thursday. Guinness officials spent about three months reviewing records, Frances said.

"It was worse than any audit you can think of," he said.

Guinness credits Frances with the record for selling the policy, surpassing United Kingdom life insurance salesman Peter Rosengard who helped put together Geffen's policy.

Frances is president of Santa Barbara-based S.G. LLC. The firm has represented the billionaire since he responded to a direct mail solicitation in 2010.

Frances said the billionaire wants to remain anonymous for two reasons: privacy and keeping the news from his benefactors.

"He wants his next of kin to keep working hard," Frances said.

Frances said the billionaire purchased the insurance to help his heirs avoid paying a 45 percent inheritance tax upon his death. Frances also said, generally speaking, that many super-wealthy people are taking out big loans because interest rates are low. Those loans are to be paid in full immediately upon death, further cutting into a billionaire's cash holdings.

"Most billionaires have their value tied up in hard assets and maybe don't have so much cash immediately available for such a big hit," Frances said.

Frances said that the annual premium is in "the low, single digits of millions of dollars." He said the insurance companies benefit from the deal by immediately investing the premium, and their risk is if the billionaire dies too soon.

Frances wouldn't disclose the billionaire's age.

Several billionaires have connections to Frances' firm, including Google Chairman Eric Schmidt and Palantir Technologies co-founder Joe Lonsdale. Frances declined to discuss identity of the policyholder. Elon Musk, the founder of Paypal, Tesla Motors and other startups, declined to discuss with the San Jose Mercury News whether he was the policyholder.

Forbes reports that California can lay claim to 111 billionaires, with about a third of them considered high-tech investors.

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rondow427 March 15 2014 at 8:09 PM

hello, dad remember me!

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1 reply
dehsulf rondow427 March 15 2014 at 8:29 PM

is that you sis?

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omninsurance March 16 2014 at 12:48 AM

I swear he just adopted me.

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1 reply
IN MY OPINION ONLY omninsurance March 16 2014 at 5:03 AM

Everyone thinks that way. To the hell with reality when it doesn't.

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rude March 15 2014 at 11:01 PM

I'd bet a few big bucks that the insurance companies are going to get screwed.

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1 reply
jdsept rude March 16 2014 at 6:40 AM

Insurance companies seldom get screwed unless by a natural disaster. How many ever go out of business? They have quite smart people that assess the odds and charge rates accordingly. YOU may total two cars in a year which costs insurance companies but how many go life times without any accident and pay those premiums. Been driving 51 years and never one claim. The wife almost the same, my mother over 60 years the same. Paid house insurance 40 years, again not one claim.

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Hi Lorraine March 16 2014 at 2:44 AM

Who cares????????????????

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2 replies
johnnapa Hi Lorraine March 16 2014 at 3:05 AM

Exactly, Lorraine!

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frozenbull Hi Lorraine March 16 2014 at 8:16 AM

Yeah I rarely say that ,but your right .

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stengernc March 16 2014 at 9:00 AM

Trash the tax code which is about 2 foot high of rules, regulations, exemptions, penalties and BS. Replace it with a flat consumption tax. A billion dollars has no value at all unless the money is spent...then tax it because it was used. Tax all transactions going overseas the same way to prevent folks from taking their money out of the country without paying a tax. Every American should pay a $100 annual resident tax for the privilege of living in the USA and to support the federal infrastructure that they use. Billions will be save since we don't need tax lawyers and CPA to do our taxes now and the IRS would shrink by 90% saving billions of tax dollars.

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gfirealty March 15 2014 at 9:57 PM

Insuance is usually purchased to support those you leave behind....although I suspect this policy was purchased to pay Federal inheritance taxes when the guy craps out...

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1 reply
nyhuguenot gfirealty March 17 2014 at 12:46 AM

It's the main mathod used by small businesses to passs on a business to the children so they won;t have to mortgage it. Or, many owners sell the business to the children so they have an income for retirement with a poicy to cover the unoaid debt. See your financial advisor. There's no crime in tax avoidance.

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derrickh212 March 16 2014 at 11:32 AM

The BEST way to keep a " Fellow Customer for Life", is to Definitely over Pay Him/Her. While they all have Beds & Alarm Clocks! Jet-Setters, Jet-Set ALL year 'round NOT on Vacation/Holiday! But, one Thing that keeps you coming back they know....................... (Ego, I, ID Self) you Indentured Servants are just as POMPOUS!!!!!!!!!

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captgma March 16 2014 at 11:59 AM

Taxes-Taxes Taxes----Those Washingtoh DC basterds will get there share of your $$$ even when you die so they can waste it away on there liberal social programs. Imagine this, you are an average American pluging away and you hit the lotery BIG, the Goverment becomes your partner, not your wife, siginificent other or even your partner but the MF Goverment. Or picture this, your grandfather works very hard all his life as does your fatherin a good business. They employ many people helping the American economy grow by enabeling them to buy homes, cars, put there kids thru college etc. Then a tradgity occurs, your grandfather and father are in a terriable accident and die. The MF Goverment just became your senior partner. This has actually happned causing the company to go out of business, all those employees loose there jobs and benefits all because of a MF Goverment----they should all die of cancer.

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1 reply
frankbvt captgma March 16 2014 at 12:15 PM

Total bunch of right-wing apologist crap. What about the corporate welfare that you so conveniently fail to mention? Who picks up the slack when GE and a myriad of other corporations (otherwise known as job creators) fail to pay any income tax for years? If tax breaks lead to job creation, how come the US isn't currently in the midst of the largest job creation outbreak in history? In the last 15 years, we have had the largest tax breaks for the job creators in our history, and yet, where is the job creation to match? Answer: it is safely stashed away in overseas tax shelters.

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1 reply
josephpeter frankbvt March 16 2014 at 2:05 PM

That's telling this jerk like it is, with you all the way............

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bacfsu March 16 2014 at 12:46 PM

Reading most of these comments reminds me of why our country is in such turmoil.. uneducated uninformed people injecting their respective uneducated uninformed comments off as facts, when they are incorrect.
1. He is not paying $200 million in premiums, he is paying "high single digit million dollar premiums a year", which means hes probably paying about $8 million a year, and if he dies, the insurance comp pays $200 million - so he's not "paying" $200 mill
2. "He is doing this to avoid 45% inheritance taxes"? Of course he is
- The money that would be taxed at 45% HAS ALREADY BEEN TAXED.. its after tax dollars, so hes using a common estate planning tool to pay for the stupid liberal bellcow known as the Estate Tax (also known as double taxation)
- This estate tax figure also doesnt include any potential probate costs
- This figure also doesnt include any future income taken from qualified inherited plans, known as income in respect of a decedent
- This is not income tax evasion-which is illegal, its tax avoidance.. and he has to pay a premium to be able to do it
-Tell me how many of you would not take any legal tax deductions or take advantage of any and all tax law to lower your own tax liabilibity..the answer? ZERO.. except for those too ignorant to know what to do
(Ask Joe Robbie's family what its like to be forced to sell the Dolphins because he didnt sign his life insurance policy)
- Admit it... how many of you complaining actually knew this money had already been taxed previously... come on.. admit it.. you didnt know- did you... ADMIT IT
3. What most of you people dont ever want to accept, is that one of the biggest ways these "rich people" lower their tax liability is through giving their money to charity, establishing trusts etc. yet you only focus on the dirty rich and how unfair income inequality is.. ohhh puullleeasseee
4. Its his money.. WHAT DO YOU CARE.... jealous??? did you ever stop and think that all the people that criticize the rich are the same people that are so busy complaining about how unfair everything is.. jealousy rearing its ugly head.. ( and yes, Ive been so poor Ive had to give blood to get $15 to buy groceries, but I didnt complain about how unfair life was-I worked my tail off and did something about it)

So a note to all you internet tough guys who think you know what you are talking about... stop complaining & learn your facts

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4 replies
belldn3 March 16 2014 at 12:14 AM


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1 reply
IN MY OPINION ONLY belldn3 March 16 2014 at 5:02 AM

Amen, The rich cannot enter the Kingdom of God, like a camel finding a needle in a pile of hays. Obama's heading south when his heart quits beatin' cuz his false religion, KORA. Jesus Christ is the only way to Heaven not preachers, money or women.

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