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What if you could give your children or grandchildren a gift that could last for life? Particularly if your cost was far less than the benefit they will enjoy?

That’s what life insurance can do for your family.

Buying universal or whole life policies while your kids are young (newborn to age 20), allows values to accumulate tax deferred so that eventually they can be used to help them buy a home, start their own business, or even supplement their retirement. Buying life insurance or annuities for your young children also guarantees that as your child matures, marries, and has their own children, there will be protection for their families too.

As the cost of life insurance is lowest at younger ages, you as the parent or grandparent can set up a significant plan without compromising your own financial security. These low costs are guaranteed to never increase, and regardless of what your child’s future may hold (i.e. a future illness), they never need to worry about being uninsurable or paying higher rates.

You can pay over time, or in one lump sum.

An interesting estate planning idea, known as a “Cascading Insurance Program” provides grandparents the opportunity to pass along money directly to their grandchild. When grandparents buy insurance on the grandchild and later die, the grandchild then becomes owner of the policy, along with its cash value. The funds skip a generation and end up with the grandchild without any income tax consequences to the grandparent or their estate. In addition, when the parents are named beneficiary, the investment

funds then receive protection from any claims of creditors.

For those who like the certainty of guarantees and not having to manage investments, grandparents can also buy a life annuity or annuity-like product and arrange for the income to be paid to their grandchild as an ongoing gift. The payment can be made on the grandchild’s birthday, or to mark another special occasion. Life annuity or other annuity like products produce very tax advantaged income.

Whether you want to guarantee an estate for your child or grandchild, provide a financial gift, or employ an estate planning strategy, insurance solutions can provide significant benefits.

Talk to your ZLC Associate to see if the gift of life insurance makes sense for your family.

©iStockphoto.com/ Catherine Yeulet