Can I buy a life insurance policy for my niece and nephew and gift it to them?

We always feel as though we have a special relationship with our nieces and nephews. We usually get to watch them grow up and feel more affection because they remind us of the best parts of our own brothers and sisters.

Living in NE Arkansas, you may have already seen ads for GTW Insurance gotten the idea that life insurance would make a great gift. But if you are worried that it may be complicated, here are the basic rules about whether or not you can purchase life insurance policies as gifts for nieces and nephews or other people.

Consent

The number one rule is consent. You will need to have the approval of whomever you purchase the policy on, and if they are minors, you need to get the parents’ permission.

Getting the policy without consent is really serious, and would be considered insurance fraud. Luckily, there is so much paperwork involved in getting a life insurance policy that it would be difficult to get life insurance policies on people without their consent.

Insurable Interest

You can’t just take a policy out on a stranger at a nursing home or your favorite teacher. You need to prove you really are related and have an insurable interest. 

The Earlier, the Better

You probably already figured out why this is such a great idea. If you purchase the policy for them while they are very young, even babies, you can lock in a low price. Depending on what kind of insurance you get, it may even serve as a good investment.

If you are in NE Arkansas and are seriously considering gifting life insurance policies to relatives, call GTW Insurance so we can help you lock in the lowest price we can find.