The case for the child-owned life insurance policy
September 30, 2014 by Warren S. Hersch
For most producers who sell individual life insurance policies to families, the terms “policy owner,” “insured” and “beneficiary” call to mind “parent,” “parent” and (absent a spouse) “child,” in that order. It’s not every day that a child applies to be both policy owner and beneficiary of a contract in which the parent is merely the insured.
There are, however, scenarios in which such a labeling of the contract parties makes good sense. In cases where one or both parents desire to use life insurance to execute traditional estate planning, wealth transfer or long-term care objectives, but are unable to fund the insurance wholly or in part, then making an adult child the policy owner and premium payer could be a solution. Click here to read…