Many people buy life insurance policy as a gift for children, giving them directly or through a trust arrangement. Various arrangements are available to provide gifts of policies. For example, a parent, grandparent or other responsible person who supports the child may purchase life insurance on the child’s life and pay the premiums, which constitutes a gift to the child.
People give gifts of life insurance to minors for many reasons. There are often tax advantages to making such gifts. For example, a gift can be used to shift income from the high-bracket donor to the lower- bracket children over the age of 14, with the result that total family income remains the same, but total family taxes generally are reduced. Gifts of life insurance can result in reduced probate and estate administration expenses, because property given away during life generally is not included in the probate estate.
A cheap life insurance quotes requires no supervision or investment management.
The gift is not open to public scrutiny unless the parties involved choose to make it so. This is unlike property passed by will, since a will becomes a public record available for anyone who wants to examine it.
The life insurance protects the child’s insurability if he or she should become uninsurable later and unable to purchase new life insurance. Even if the child becomes disabled later in life and ineligible for new life insurance, his or her existing coverage cannot be taken away. Also, a guaranteed insurability option generally is available; this guarantees the child the right to purchase specific amounts of additional life insurance at various times in the future—without evidence of insurability and at standard rates even if he or she has become uninsurable.
A gift of cheap life insurance quotes to a child is very economical. The earlier the age when a child becomes insured, the lower the annual premium will be, the less the total amount that will be paid over the child’s lifetime and the more years of life insurance protection the child will have.
Such a gift also can give a child financial independence and maturity. It assures the donor that funds will be there in the future when the child needs them the most, whether or not the donor is still living. In fact, a gift of life insurance is a life-long expression of love and interest in a child’s welfare.
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