You can absolutely gift life insurance to someone you care about for any reason and at any time! The holidays are approaching, and that can leave many people feeling hard-pressed to find the perfect gift in time. You might not think of a life insurance policy as a gift – you certainly can’t wrap it up, after all – but it’s something your loved one is bound to appreciate.
Buying a Life Insurance Policy for Someone Else
Benefits of Gifting a Life Insurance Policy
Purchasing life insurance as a gift comes with a few benefits. The most important of these is peace of mind knowing that there’s a financial safety net out there. If your loved one is experiencing hardship, they can convert the value of their life insurance policy into cash during their lifetime. This will reduce the death benefit their loved ones can receive in the end, but it can also be worth it when money’s tight.
Another benefit of gifting life insurance is helping your loved one get covered while they’re younger and healthier. If you’re a parent or grandparent, giving a younger relative a whole life insurance policy can lock them into a highly affordable premium for the rest of their life.
Even a term life insurance policy can be an excellent gift when you want someone to know you care about making sure their loved ones are covered during for any period of time during their life.
You Can Transfer Ownership of Your Life Insurance Policy
If you have a life insurance policy in your name, you can transfer ownership to a loved one or even an organization you care about. This makes the gift recipient both the owner and beneficiary of the policy, which means they will receive the full cash payout when you die. Just keep in mind that you must continue to pay your premiums, or your policy will expire!
There are also important tax implications for transferring ownership of a life insurance policy. If you gift it to a certified 501(c)3 organization, you can deduct the premiums you pay and up to 50% of your adjusted gross income. If you plan to gift your policy for tax-related reasons, be sure to consult with a financial advisor for a full understanding of your unique situation.
You Can Also Name Someone as a Beneficiary on Your Policy
You can also consider naming someone as the beneficiary of your life insurance policy as a gift. If you go this route, you don’t have to transfer ownership of your policy. You can still take advantage of the cash value of your life insurance if you’re in a pinch, but you can also rest assured knowing that your loved one can have cash that your creditors can’t touch after you die.
You can even name multiple beneficiaries, making this a gift that all of your loved ones may benefit from one day.
Contact Us to Learn More About Life Insurance
A life insurance policy is an important asset that not enough people have. If you want to gift someone a life insurance policy, reach out to our experts at Insurance Specialists, Inc. to learn more.
Contact us online or call (888) 451-0883 to get started.