GRANDPARENT GIFTING​

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Grandparents have an opportunity to leave a legacy with their grandchildren through the gift of permanent life insurance. Permanent life insurance can provide a “safety net” of financial security and provide protection in a way no other financial instrument can. A “cash value” permanent life insurance policy can last a lifetime and can be an important part of a grandchild’s financial future and taking a closer look at the long-term benefits to the grandchild makes it clear why this financial instrument is a worthwhile option.

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Some advantages of purchasing life insurance on a young child include:

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• You’re grandchild is guaranteed the ability to have permanent life insurance protection for his or her future family regardless of any changes in health down the road

• A low-risk means of creating a financial asset which grows tax-deferred

• A financial resource which can be used to help pay education expenses without affecting eligibility for financial aid

• A source of cash value which, if not needed for education purposes, can be used for anything a grandchild may need down the road such as a first car, wedding, down payment on a first home or even starting a business

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In many cases, grandparents take out a permanent life insurance policy on their grandchild and name themselves or the parent as owner and beneficiary and pay the premium each year. This approach gives full control of the policy and the option to eventually transfer ownership of the policy to the grandchild after he or she becomes an adult.