4 Surprising Famous People Who Had Life Insurance (and What You Can Learn)

Sometimes it feels like celebrities exist on their own planet, complete with personal chefs, trainers and every luxury imaginable. There’s a goofy appeal to the “they’re just like us” pages in supermarket magazines that show stars grocery shopping or scrolling their phone while their kids play at the park (been there).  Admittedly, the movies get a lot of plotlines wrong when it comes to life insurance. But it turns out famous people are thinking about insuring their loved ones, too, including some names you might not ever have thought would have a policy. What’s more, some major celebrities have dealt with life insurance struggles that everyday parents can learn from, too.

1. Heath Ledger

Heath Ledger, of 10 Things I Hate About You, A Knight’s Tale and The Dark Knight, tragically passed away at only 27 years old. He had a $10 million life insurance policy intended for his 3-year-old daughter, Matilda.

Even people making millions of dollars can benefit from life insurance. High earners often live expensive lifestyles, so income doesn’t always mean lots of savings in the bank. Large estates are also subject to estate taxes, which a life insurance policy can help cover.

There were two problems with the plan. One was that the insurance company was concerned Ledger wasn’t fully open on his application as he may have omitted information about driving tickets or substance use. Insurance policies typically come with a contestability period. During that period, an insurance company can investigate claims before paying them. If there’s misrepresentation or inconsistencies in the application information, the insurance company may deny the claim or retroactively charge higher premiums for coverage. (Ultimately, Ledger’s insurance case reached an amicable settlement.) The second issue was that Matilda, being a toddler, couldn’t receive the death benefit directly. If you want insurance policy benefits to go to your kids, the money needs to go into a trust until they’re of age.

Takeaway for non-famous parents: Be open and honest on application materials, and set up beneficiaries with any trusts they may need so they’re ready to receive death benefit money.

2. Queen Victoria

On one hand, Queen Victoria had nine children, and life insurance is often a great tool for parents to provide for their families. On the other hand, while it’s not easy to be too rich for life insurance, the ruling monarch of an empire is in a very different situation than typical parents! It’s surprising to learn that Queen Victoria reportedly had several life insurance policies in her name.

Another party may have purchased a life insurance policy on her behalf. Insurance companies may allow this if someone has “insurable interest,” meaning the person can prove they’d suffer financially if the insured person passed away. For example, if an organization could consider the ruling monarch a “business partner,” an insurance company might be able to approve a policy. 

It’s possible in modern times to take out a life insurance policy on someone else’s behalf, but only with their permission (otherwise it’s illegal and a form of insurance fraud), and not all companies allow it. (Fabric, for example, does not support policies where the owner is someone other than the insured.) 

Takeaway for non-famous parents: Not even a queen is too rich for life insurance. Even if your kids are covered by your savings, consider whether other people in your life (e.g., relatives, business partners) might need a life insurance benefit to avoid financial hardship without you.

3. Whitney Houston

Whitney Houston’s powerful voice left an enduring legacy in the world of music. Unfortunately, she faced various financial and personal hardships throughout her life, and passed away at only 48 years old. 

Despite her incredible talent and lucrative career, Houston’s legal battles and struggles with substance use left her finances in rocky shape when she passed away. She reportedly left behind a $312,000 life insurance policy as part of her assets, but she had little in the bank and lots of debt to settle. 

Fortunes can change unexpectedly. Having enough life insurance coverage can help make funds available for your loved ones regardless of how your regular financial affairs pan out. Financial experts often recommend rule-of-thumb calculations like covering 10 times your annual income, so many non-celebrity parents have larger policies than Houston. 

Takeaway for non-famous parents: When you’re figuring out how much life insurance you need, consider debts and the cost of future plans to cover what’s important to you.

4. Charles Dickens

The famous author bought a life insurance policy when he was 29, with a coverage value of £5,000 (£300,000 in today’s money). Buying life insurance when you’re young is a smart choice, both because premiums are cheaper when you’re younger and because many people have more big life events to protect (e.g., getting married, having kids) when they’re younger adults. 

Like modern life insurance applicants, Dickens had to provide medical information with his insurance application. Unlike today’s applicants, he had to confirm he wasn’t afflicted with ailments like “Rapture,” and provide a health statement from a friend. Today, you can expect to be examined by a doctor or skip blood draws and urine tests with a no-exam policy.

Dickens’ attention to health and finances paid off. He kept his policy in effect until his death from apoplexy (probably a stroke, in modern language), and his beneficiaries got the life insurance benefit.

Takeaway for non-famous parents: Buying insurance when you’re young is a good way to get lower premiums and cover your family as soon as possible. Dealing with the inconvenience of a health exam (or skipping one if you can, with no-exam term life insurance) is worth it for the long-term protection for your family.

Whether you’re globally famous or mainly popular in your own house, you never know exactly where life will lead you. Celebrities and non-famous folks alike can get meaningful peace of mind from having the right amount of life insurance coverage in place for their loved ones.

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