A mystery billionaire from Silicon Valley has purchased a $201 million life insurance policy, smashing the previous record of $100 million by the entertainment mogul in 1990, according to Guinness World Records.
The billionaire chose to stay anonymous, at least for now, because “he wants to keep the next of kin working hard,” according to Dovi Frances, president of Santa Barbara-based S.G. LLC.
Frances is credited by Guinness with having brought together the 19 insurance companies necessary to underwrite the single policy. “No one company can afford to take a $201 million hit,” he told USA Today. Frances did not say how big the annual premium is, but put it in the low single-digit millions.
The guessing game over the billionaire's identity is complicated by the proliferation of mega-wealthy Californians. There are 111 billionaires in the state, according to Forbes, and about a third of them are in tech.
The San Jose Mercury News took a stab at guessing who the billionaire is, suggesting to Frances that it was Yuri Milner, a Russian who helped fund Facebook and owns a $100 million home in Los Altos Hills. Frances didn't respond. They then tried Google Chairman Eric Schmidt and Palantir Technologies co-founder Joe Lonsdale. No go there either. Oracle CEO Larry Ellison didn't respond to their emails and a PayPal/Tesla mogul Elon Musk spokesman would not comment.
California has nearly one-tenth of the world's billionaires, according to Forbes. Bill Gates is the richest man in the world, with $76 billion, followed by Mexican telecom mogul Carlos Slim Helu at $72 billion. Among the state's tech billionaires, Ellison clocks in at No. 5 ($48 billion), Google CEO Larry Page is No. 17 ($32.3 billion), Jeff Bezos is No. 18 ($32 billion), Sergey Brin is No. 19 ($31.8 billion), Facebook CEO Mark Zuckerberg is No. 21 ($28.5 billion) and Steve Ballmer is No. 36 ($19.3 billion).
So why does a billionaire who presumably already has millions of dollars to leave to heirs feel the need to pay millions for a life insurance policy? Frances said the answer is taxes. The billionaire wants to offset state and federal taxes on his estate, known as the “death tax” in right-wing circles. “If your properties are leveraged then those loans are called immediately and need to be paid off,” Frances told Forbes.
The levy is also known as the anti-oligarch tax in other quarters. In 2012, the top 1% of earners in the United States picked up 20% of the nation's income, a state of income inequality that hasn't been seen in this country since the 1920s.