Want to give a lasting gift that will benefit your child or grandchildren long after you give it? Though it may not be at the top of their wish list, life insurance is a smart, loving way to invest in their future, and it’ll be something they will never outgrow. Here are some scenarios where you could consider giving life insurance as a gift.
Life Insurance: A Gift to Newly Weds
When your child is all grown up and ready to tie the knot with their special someone, life insurance can be an ideal gift to give as they begin this new journey as a married couple. During this chapter, couples are typically focused on future plans and finances. Having life insurance can help them secure their plans with a stable safety net that can allow them to focus on other financial commitments.
Life Insurance: A Gift to Your Grandkids
Being a grandparent is often an exciting and joyful chapter in life. You get to spend time with your grandkids and rekindle those nostalgic memories you had when your own children were young. As a grandparent and extended caregiver of your grandchildren, you can buy them life insurance and give it as a gift to invest in their future. When doing this, you have the option of putting your own name, their parents or another member of your family as the beneficiary.
Life Insurance: As a Thank You
If a family member offered their love and support to you during a difficult time and you’re looking for a heartfelt way to convey your appreciation in return, this might also be a suitable occasion to offer life insurance as a gift. It could be the best way to truly show them how much you love them and care about them.
Life Insurance: As a Charitable Donation
You could even choose to donate it to your favourite charity as a memorable act of kindness. All you have to do is purchase a new life insurance policy, and name the charity of your choice as the owner and beneficiary. You can donate an existing policy too. Either way, you will receive a charitable tax receipt for your contribution.
What should people know before buying life insurance as a gift or gifting life insurance?
Buying life insurance for someone isn’t always a straightforward process. There are many rules and regulations that need to be followed in order to do it correctly. For example, you’re not permitted to gift life insurance to just anyone or without a valid reason. You’ll need to provide an insurable need/reason for why you’re planning to purchase a policy for them. As a complex process, it’s imperative to consult with an insurance professional when you’re considering this option so you can be crystal clear on what the specific requirements are for your situation.
Calculate how much insurance they’ll need
You’ll also need to calculate how much life insurance the person would need and which policy would be best suited for them. Specifically, think about any debts they may have or education fees. But keep in mind that during the entire policy term, you may have to pay premiums. So make sure it’s something you can afford.
Talk with a Trusted Advisor
Important life decisions such as this require a trusted insurance broker who can answer your questions and guide you through the entire process while having your best interests in mind.