As we get into that traditional time of giving, many are wondering what would be an ideal gift. Will it bring joy or is it better to give something practical?
I have noticed that more parents and especially grandparents are concerned about long term, lasting, impactful gifts. Why not give the gift of permanent insurance?
That sounds odd.....who would want insurance as a gift? Chances are no child would and if they do, that would be quite unusual.
Why would I suggest such a thing then?
More parents and grandparents are reflecting on the family going forward, not just for the immediate gift giving season. I'm not suggesting that insurance replace the gifts that would normally be given to children. I'm saying that while we're thinking about those gifts, it would be a great time to look at your legacy.
How do you want to be remembered? Would you like to be responsible for improving the qualify of life for your grand children and great grandchildren that aren't born yet?
I've helped several parents and grandparents insure their young children and grandchildren.
Why would anyone do that? Let's look at the 2 types i'm referring to......Life Insurance and Critical Illness insurance.
There are several great products out there. You can get coverage that can be paid for over a 8, 10, 20 year period or even for life. I generally help my clients purchase one of the limited pay policies as it's more practical. A policy would be paid off early and the gift would last the lifetime of the grandchild.....that could be 100 years from now. It is unlikely that a grandparent is going to continue paying for that especially since they're likely to not be around 100 years from now. They want something manageable and predictable to know that it will be there when needed and long after they're gone.
For example, i've shown a grandparent where they can spend $360/year on a grandchild for 20 years. They would spend $7200 over that period of time and have an immediate $50000 benefit if things went wrong early. If things go as expected, the policy will continue to build on itself long after the payments stop and leave a positive impact on the grandchild's family. There is even a cash value buildup that offers some other options for loans.
More and more grandparents are loving and signing on for this gift. As they live longer, they've seen some things and recognize the value of such a product. This gift makes up part of their legacy for their family.
CRITICAL ILLNESS INSURANCE
Thiscoverage is a different animal than life insurance.
More parents purchase this for their children than grandparents do. I've been asked by a friend recently, "Why would you purchase insurance for your children when they don't earn an income?" I asked her if her daughter was diagnosed with a critical illness (life threatening cancer, stroke, MS, Bacterial Meningitis, Benign brain tumor, Kidney failure, Major Organ Failure on a waiting list etc, what would she do? Who would stop working to care for a child?In her case (and most) it would be Mom. Does Mom have benefits at work? Does it matter? It may not as Mom would not be the sick one so she may not be able to make a claim. A lot of jobs are accommodating and will give time off, but with no income (or limited), that brings it's own headaches. Do financially stressed out parents from less income and more expenses make for an easier treatment period? Likely not. Having a lump sum come into the household to remove or minimize the financial impact allows Mom (or both parents) to take time off and concentrate of taking caring of their child. This may allow a grandparent to travel and stay if either parent can't take time off. What if the best care available is in another country? The funds could help pay for trips and treatments. Options---that's what it's all about. The lump sum gives the family financial choices that can mean the difference between life and death. If things go the way we expect, then that scenario is avoided. The coverage could be paid off and sit there until a covered condition diagnosis happens or the return of premium (option) could be triggered. Choices.
These gifts (whether alone or in combination) are a wonderful offering to your family. They create a lifelong positive impact for a family and are a wonderful legacy.
As we enjoy the holiday season and spend the gift of time with our loved ones, remember there are some gifts that may not be fun to open, but their positive impact can go on for generations.
For more information, please contact me at [email protected] I look forward to sharing some information and helping you make positive, life-changing gifts to your loved ones.