It is said that kids these days have everything, and sometimes it becomes challenging. Gift-giving becomes a chore, and knowing what to get them for birthdays and other celebrations is impossible when they seem to have everything.

And, with the holidays just around the corner, many parents and grandparents may find themselves asking:

  • What sort of lasting gift can I get my child this year?
  • What type of present feels more special than all those plastic toys and would hold a bit of long-term value?
  • How can I be sure my gift won’t be tossed aside for the next fad or at the mention of their iPad?

Well, we’ve got three words for you: Intergenerational Wealth Transfer.

Lasting? Yes!
Special? Absolutely!
Of value? One hundred percent.
Can’t be tossed aside? Literally.

An intergenerational wealth transfer is as simple as purchasing a whole life insurance policy for your child or grandchild and then transferring ownership to them when they reach legal age. Giving your child or grandchild can reap the benefits of your gift while you’re still around to see it.

When you think of life insurance, you probably think about the money a loved one receives after the insured person’s death. While that is generally the primary purpose, whole life insurance also comes with something extra called a cash value. This policy portion grows over time and can be accessed while the policyholder is still alive.

Value That Grows With The Child
If you need more clarification on how this can work, let us paint a picture for you: for a low monthly premium, imagine purchasing your young daughter or granddaughter a 20-pay whole-life policy worth $100,000 in coverage. To help the total cash value grow even more quickly, you also have the option to participate in Paid-Up Additions, where you can choose to add a little extra – in this case, the growth portion of your policy (otherwise known as the dividends) – toward buying another layer of coverage. Although not guaranteed, these extra injections can result in a more significant return on your investment at a speedier pace. And what is the best part of a 20-pay whole-life policy? Your payments will stop after twenty years, but the policy will carry on accumulating its cash value!

Here’s How The Process Works:

  1. Set up a consultation with your Life Sales Agent to discuss your options and receive illustrations based on your desired coverage amount.
  2. Start an application for a participating whole-life policy for your child or grandchild. You can choose a 20-pay or whole-life policy; it’s up to you!
  3. Name a contingent owner (i.e., someone who will assume ownership of the policy if you, the policy owner, die). In this case, the parent or guardian of your child or grandchild makes the most sense.
  4. Make the monthly or annual payments until you are ready to pass ownership to your child or grandchild. In most cases, the child will take over the payments once they reach legal age (unless you purchased a 20-pay whole-life policy and the payments have already stopped).
  5. Then, at a date of your choosing – and when they are of legal age – you’ll transfer the policy ownership to your child or grandchild. At this point, the policy is now in their name.
  6. The policy’s beneficiaries can then be updated to the person(s) and/or charitable organization of your child or grandchild’s choosing.
  7. Your child or grandchild can access the cash value through a policy loan or withdrawal. 

So, if you’re still looking for that special, lasting gift for that special young person, this might be it! Over the course of their lifetime, the cash value of the whole life policy you’ve gifted to them may have grown considerably, which can be a huge help if your child or grandchild needs help paying for their college education, a wedding, or putting a down payment on a home. And, even if they decide not to access the cash value, insuring your child or grandchild while they’re young and healthy secures their insurability, regardless of any possible future health diagnoses or risky hobbies that could make getting insurance at a later age more challenging. Intergenerational wealth transfer through a whole life policy sure is that special gift that keeps giving!

If you would like any further details, don’t hesitate to get in touch with Mahkai W. Outerbridge, Life Sales Agent at Freisenbruch, at 441 294 4618, 441 534 0006, or  for more information.