By: Jay Scheiner
CEO, ASG
The insured (donor) may make the loved one , who may be the beneficiary of the policy, or in some circumstances, they may become the policyowner as well as beneficiary.
Keep in mind, there must always be an “insurable interest” between the insured and the policy owner and beneficiary at the time of policy purchase.
Only permanent policies (not term) make sense for gifting – in this way the insurance (gift) is good whether the insured dies at 65 or 80 or 105.
The life insurance policy will be a lasting gift – and will someday blossom to many times the premium paid – as a tax-free lump-sum benefit to the beneficiary.
However, if the donor wishes (and maintains ownership of the policy) – the donor may specify that the death proceeds may be paid to the beneficiary over their lifetime – instead of a lump-sum.
In this way, the gift to the loved one can be one that can never be outlived.
Holiday time is the perfect time to talk about setting up a plan to provide for those special people in one’s life. ~JS
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