The most common go-to choices when giving meaningful gifts that will last a long time are gift cards and gadgets. However, what if I told you there was a way that you could impact the life of the person you care for? That is giving insurance as a gift. But how to give life insurance as a gift is a question that many people are not too sure about.
Although it might seem like a good present or gift idea, it is a great opportunity to protect the future of your family and loved ones and give them peace of mind and financial stability. In terms of long-term benefits and appealing gift value, life insurance beacons as an excellent option.
However, the question now is; can I give life insurance as a gift? To find out, check out the next section.
Types of Life Insurance
Here are the types of life insurance that you need to know about if you are considering gifting one to a person:
| Type | Term | Premiums | Death Benefit | Cash Value Component |
| Term Life | Usually, 10, 15, 20, or 30 years | Fixed | Fixed | No |
| Whole Life | Entire life | Fixed | Fixed | Yes |
| Universal Life | Entire life | Flexible | Flexible | Yes |
| Variable Universal Life | Entire life | Flexible | Flexible | Yes |
| Indexed Universal Life | Entire life | Flexible | Flexible | Yes |
| Guaranteed Issue Life | Limited | Fixed | Fixed | No |
| Simplified Issue Life | Entire life | Flexible | Flexible | Yes |
| Group Life Insurance | Usually employer-based | Fixed | Fixed | No |
| Child Life Insurance | Limited, usually until the age of 25 | Fixed | Fixed | Yes |
| Survivorship Life | Entire life | Flexible | Flexible | Yes |
| Final Expense/ Burial | Entire life | Fixed | Fixed | Fixed |
Can I Gift Life Insurance?
Yes,you can gift life insurance if you are looking to make an impactful and meaningful gesture. Besides, if you give a life insurance policy as a present to a person, you are buying a quote where you are the person responsible for the premium payment and owner as well. Meanwhile, the insured party is someone else like a close friend or family member. This act can give your friend or family financial security and peace of mind if something unexpected happens.
Nonetheless, when looking to gift a life insurance policy, you need to do the following:
- Pay the premiums.
- Select the right insurance quote.
- Understand ownership and beneficiary designations.
- Discuss with the recipient beforehand.
- Think about tax implications.
With these steps, you can successfully give life insurance as a present that provides financial security and long-term benefits to your loved ones.
How to Give Life Insurance as a Gift
It is quite thoughtful and unique if you have plans to gift life insurance to a person as it offers peace of mind and financial security to your loved ones. Here is a comprehensive guide you can follow to begin and finish this process:
Determine the Type of Life Insurance Policy
Yes, the first thing you need to do is choose what type of life insurance policy you want to give. Moreover, it is very important that you choose the right quote. To find out which policy is best for the person, assess their financial goals and needs. Then, you can choose if it is whole life, term life, final expense/burial insurance, universal life, or whole life insurance.
Research and Compare Life Insurance Quotes
As mentioned previously, it is crucial that you find the best policy. This is where researching and comparing policies come in. Compare life insurance providers and find the policy features and competitive rates. You can use online comparison tools or check the reviews of providers online to confirm the insurance company’s reputation.
Buy the Policy
If you have eventually found a good life insurance quote that meets the coverage and financial needs of that person, purchase it. Begin the application process by filling out the form and providing the necessary information and documents of the person. Select beneficiaries who will get the death benefit in case the insured person passes away.
Make Premium Payments
Since you are the one who will be responsible for the premium payments, make sure that you make them on time to keep the policy active. In the meantime, make the initial payment to activate the life insurance policy and continue ongoing payments afterward.
Transfer Ownership
On the other hand, if you want the recipient or the insured to be responsible for the policy, then you can choose to transfer ownership after you purchase it. Do the necessary with the insurance company to officially transfer ownership to your desired recipient.
Inform the Recipient
It is essential that you tell the insured or recipient about the purpose and value of the insurance quote. Do not forget to share details of beneficiaries, premiums, and coverage to help them understand better.
Go Through the Policy Regularly
For ongoing management, it is crucial for you to periodically review the life insurance quote to monitor coverage. Moreover, if there is a need for adjustments due to significant life changes or events, then make them.
Final Thoughts
Before giving someone a life insurance policy, it is important to do this with their consent. In other words, you cannot purchase a life insurance quote for someone without their consent or permission. This is because the insurance provider will need the personal information of the person like social security number and health details. Additionally, the insured party will need to sign the documents associated with the quote.
