Michael Jackson's $18.87 Million Life Insurance Policy Subject to Speculation
The untimely death of the international pop icon and originator of the "Moonwalk" has left in its wake not only a grieving family and legions of mourning fans, but also 50 cancelled concerts and a promoter facing enormous losses. AEG Live, the L.A.-based promoter of Michael Jackson's sold-out tour, originally stood to gain 5 to 10% of the gross ticket revenue of $90 to $100 million, in addition to nearly $15 million from concession and merchandise sales. Now losses are estimated at $24 million. Why not $90 to $100 million, then?
That's because AEG did not jump into the concert deal without a lifeline or two. Shortly after Jackson's death, the promoter stated that it had taken out an £11.7 million ($18.87 million) life insurance policy with Lloyd's of London, an insurance market that sells specialty insurance to businesses worldwide.
According to Insurance Journal, the policy is "essentially accidental death or disability coverage," and reportedly specifies a payment should Jackson prove unable to perform due to external causes. The recent revelation of the star's dependency on prescription drugs will have a bearing on any possible life insurance payments.
AEG's Savvy Purchase of Event Cancellation Life Insurance
AEG took out insurance for anywhere from 3 to 10 concerts, according to a variety of sources, and event cancellation is included in the policy. True to their name, event cancellation policies generally cover costs such as promotional expenses, loss of estimated earnings from the cancelled event and expenditures for equipment.
A number of commentators in the insurance industry have noted that Michael Jackson was fairly high-risk, given his earlier history. As the London insurance industry awaits the final figures of the payments from Jackson's death, however, the public has focused its attention on the star's legacy as a performer.
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http://www.insurancejournal.com/news/international/2009/07/06/101955.htm
http://www.usatoday.com/money/companies/management/2008-09-14-lloyds-lawsuit-advice_N.htm