3 Reasons to Give Life Insurance as a Gift

Everyone wants to give meaningful gifts to their loved ones, but the holiday season can get busy, and sometimes it’s hard to know if your gift ideas will have a lasting impact on the recipient’s life. 

Though it isn’t likely your first thought when it comes to holiday giving, one of the most impactful gifts you can give is life insurance. Gifting a life insurance policy to a child or loved one will reap rewards long after the season is over. It may not be on a typical list, but when used correctly, giving life insurance as a gift will continue to give. 

Here are three reasons to gift life insurance to a child (or another loved one).

 Guaranteed Insurability 

You want nothing but a bright future for your child or grandchild. Gifting life insurance to them when they’re young has a hidden benefit. By purchasing life insurance, you’re able to protect against a time when their insurability might be called into question. For instance, many illnesses can prevent someone from qualifying for life insurance coverage. But if the child received a life insurance policy when they were young, then their insurability is secured. So, by gifting a life insurance policy, you are securing insurability before a serious condition manifests, should such a thing occur.

Guaranteed Purchase 

There’s another hidden benefit to gifting life insurance to a loved one. When giving life insurance as a gift, you may have the option on certain policies to purchase what is known as a Guaranteed Purchase rider. This rider ensures that the policy holder can purchase additional insurance in the future, regardless of any medical condition. This would allow them to continue purchasing life insurance and build the kind of protection that can help them and their families for years to come. Read more about Guaranteed Purchase here.

Lifelong Uses for the Gift of Life Insurance 

Life insurance can be used for more than most people are even aware of. There’s a broad range of scenarios in which having life insurance can make a huge difference, even beyond the eventual payout. Here are just a few.

Retirement

Did you know that a life insurance policy can provide income in retirement? The opportunity for more financial freedom one day is a gift that can never be underestimated. Certain types of life insurance policies build cash value over time, and that resulting cash value can be used as a form of income in retirement. When you gift someone a policy, you offer that opportunity to them, perhaps even long after you’re gone.

Giving to Charity

 Life insurance can be used to increase the policyholder’s capacity for charitable giving. When you or a loved one has a life insurance policy, you can make a larger gift than would otherwise be possible by designating a favorite charity as a beneficiary. When you buy the gift of life insurance, you’re buying the opportunity for your loved one to “pay it forward” and create a legacy based on their own values.

College 

Life insurance can also be used to make college tuition payments for your child’s future family, should they be left without his or her salary. The same goes for a mortgage. Read more about the ways that life insurance can benefit family members here.

There are more uses for life insurance than you might expect. And by gifting it to a loved one, you’re giving them a broad array of opportunities and security — plus, you’re showing your love. In the end, life is uncertain. You can’t predict future health problems, financial obligations or what someone’s life will be like in five, ten or twenty years. What you can do is help protect that future.

Protecting Against the Unexpected

When you buy life insurance for a loved one, you’re purchasing something that will have lasting impact, long after the wrapping paper is cleared away and toys have been set aside. If you’re looking for a gift with real, lasting value, your local Farm Bureau agent can help!