Gifting Life Insurance
For those with excess money or those who have large estates gifting life insurance premiums can optimize your inheritance planning. It not only moves money out of your estate through planned gifting, but in most cases can increase the amount of inheritance left behind because life insurance can leave a death benefit that costs pennies for each dollar left, tax free.
The idea of leaving tax free inheritance through life insurance for children or other family members has been around probably since life insurance came into existence. Combining inheritance gifting and life insurance is a natural offshoot of the two ideas. Money gifted is income tax free to the recipient. Life insurance proceeds are income tax free to the beneficiary.
An example would be if you gifted a child $15,000 a year (the current limit) for the express purpose of paying the premiums on a life insurance policy on yourself. If you have several children you could gift up to $15,000 per year to each and the life insurance would be set up to make them equal beneficiaries. If you didn’t want to go through the exercise of doing the annual gift(s), your lifetime gift limit is currently $11.4 million. You could gift as much as it took to buy a single pay life insurance policy.
Leaving inheritance through gifting premiums for life insurance is leveraging your ability to leave inheritance to the max. The life insurance premiums, especially with single pay policies, will always be substantially less than the death benefit (inheritance).
Let me help you present your story to underwriters that will get you the life insurance you need, affordably.
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