Gifting Life Insurance

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Duane Bolinger, a financial advisor with Allegis Financial Partners in Portland, Oregon, recently made a presentation in our workshop about how families can plan now to economically survive and endure the loss of a parent or spouse. Life insurance, of course, was a big part of that discussion, and he shared an idea that we thought was brilliant.

When each of his children turned 18 years old, he and his wife purchased a $100,000, 20-year term life insurance policy on them. With the kids being years away from marriage and starting their own family, why would they do this? Two reasons:

  • To lock in the lowest premiums
  • Insure their Insurability

Lowest Premiums

Term life insurance is a risk/reward venture for the insurance companies. The lower the odds that someone will die within the term of the policy, the lower the premium they charge. And vice versa. The higher the odds, the higher the premium. Because an 18-year-old in good health is likely to outlive the 20-year policy, the premiums on their kids were as low as they’d ever be so they took advantage of it. In their case, the premium came to about $15 a month or $180 a year per child.

Insuring Insurability

The other reason they wanted to lock in the premiums at such a young age is best described by a phrase that Austin Bowden, a Farmers Insurance agent out of Rocklin, California once shared with us. Duane and his wife are "insuring their insurability." In other words, they wanted to guard against a time when their kids may be classified as high risk or uninsurable. Some of the factors that influence one’s insurability include health history such as heart disease, cancer, high blood pressure, etc. Even some occupations like truck drivers or steel beam workers, or certain hobbies like skydiving or rock climbing, can change your insurability.

In case you’re wondering, Duane and his wife pay the premiums and name the beneficiaries. However, the kids have the option at any time to take over the payments, and when they do, they also can rename the beneficiary to whomever they wish.

Gifting Life Insurance

While Duane’s timing to insure their kids is something we’ve not heard before, there are other more common occasions when parents gift life insurance to their children. Weddings are good time to consider a life insurance policy as it begins a time in an adult’s life when they begin to depend on another person. Another good time to consider gifting life insurance is when kids start having kids of their own. Hopefully the new parents will be wise enough to get their own but having a smaller backup policy by grandma and grandpa can bring peace of mind to everyone.

If you need further assistance or guidance, contact Prepare Your Affairs at


  • If you have children or grandchildren who are entering adulthood, talk to them about the idea of life insurance and consider gifting a small policy to them.
  • If you are a parent with kids at home and you don’t have life insurance, contact an agent and look at the options that are available to you.
Prepare Your Affairs Founders


Corey and Katie entered widowhood in 2016 after losing spouses to cancer.  They met and connected in a widow/widower support group and later married.  One of the principles they learned from their own experiences and those of other surviving spouses is that the more prepared a surviving spouse is on a financial, legal, emotional, and practical level, the better they will adjust to widowhood.  They will maintain their independence and control of their assets and be freer to properly grieve and move forward in life.  Conversely, those who are not prepared are more likely to have their lives flipped upside down.  They may need to move and uproot kids because they can't afford the mortgage, rely on family or other charities to financially support them, and/or change jobs to allow them to better serve as a single parent.  We hope to share what we've learned and help other families properly get their affairs in order and be prepared with confidence, peace of mind, and in control of their assets.