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You’ve heard the holiday lament, “What do you get the person who has everything?”

How about peace of mind and financial stability?

The gift of life insurance always fits, never breaks, is continuously in fashion, and doesn’t require batteries, service plans, or two and a half hours and a blowtorch to free from unforgiving twist-ties.

It may sound strange, but gifting life insurance has become an increasingly popular option for generous and forward-thinking individuals who want to make a true difference in another person’s life.

If your clients have expressed interest in protecting the next generation and preparing for future life events, you can help them make sound decisions with some meticulous planning in advance.

Talk with them about the most common reasons people gift life insurance, such as:

  • Preparing future generations: Various criteria surround taking out a policy for a minor, typically relegated to the owner having a vested insurable interest. Juvenile life insurance policies can be purchased by a child’s grandparents, which is one of the most common ways policies are gifted.

The grandparents typically will facilitate the purchase with the child’s parent or legal guardian serving as policy owner and beneficiary. Policy ownership can be transferred to the child once he or she reaches adulthood.  Premiums are guaranteed never to change.

Buying life insurance for a healthy child is frequently affordable and can be designed using permanent policies that provide a growing cash value to be borrowed against in times of need as the child ages. These funds can make a sizable dent in college tuition or make the dream of owning a home a reality.

Additionally, purchasing life insurance for a grandchild protects them from insurability hassles later in life due to unforeseen medical conditions that could arise.

  • Celebrating newlyweds: A life insurance policy can kick off a recently married couple’s journey together in a deeply personal way, paving the way for future financial security and providing a critical life lesson about responsibility in the process.
  • Making charitable gifts: Clients may name their favorite charity or nonprofit of choice as a beneficiary on their personal life insurance policy, yielding an impactful and tax-free payout with newfound purpose.
  • Reinforcing the family: Surprising, but true –far toomany couples do not have sufficient life insurance coverage, leaving only the working spouse with a policy. Meanwhile, the loss of a stay-at-home parent could financially devastate a family. A gifted life insurance policy could provide the added protection your client and his or her loved ones need.

When discussing the gifting of life insurance with clients, remember to cover these important touchpoints:

  • Consider a Guaranteed Insurability Rider, giving the insured the ability to purchase additional insurance in the future regardless of medical conditions.
  • Be sure to schedule regular follow-ups with your clients to review life insurance beneficiaries and make any necessary changes. Make certain you, the advisor, have updated contact information for all beneficiaries.
  • Gifting life insurance isn’t a “Don’t Open Until Christmas” kind of thing. Consent is required in most cases and underwriting isn’t speedy. Encourage your clients to start the application process early.

Belman Klein Associates, Ltd., strives to keep you on the cutting edge of your industry. We regularly partner with life insurance advisors to help them provide their clients with solutions to daunting and unusual problems. No matter the case, we can help you succeed. Give us a call at 800-729-6007 today to learn more or register today to become a partner.