Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Oct 29, 2021

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The Brief

  • Life insurance gifting is available if you have an insurable interest
  • You can protect someone you love by making them the beneficiary
  • Donating your death benefit is a more affordable way to make a sizable donation

For those who don’t want to or can’t get a life insurance policy for themselves, there are life insurance companies that allow gifting. This process will allow you to buy a policy for another individual that pays out to your choice of beneficiary.

Some sample life insurance rates for gifting are under $10.

If you’re interested in rates for life insurance companies that allow gifting in your area, enter your ZIP code into our free quote tool above.

Which life insurance companies allow gifting?

Some insurers have based a large portion of their business model on gifting policies.

Gerber, for example, provides a Gerber Grow-Up Plan life insurance policies that loved ones can gift policies to young children, which will grow in value until the child reaches the legal age to take over.

Below are some examples of average child insurance rates that will be paid by the individual who gifted the insurance policy:

Average Monthly Child Life Insurance Rates for a $5,000 Policy
CompaniesChild Life Insurance Rates
Gerber Grow-Up Plan$3.40
Mutual of Omaha$8.50
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As you can see, the Gerber Grow-Up Plan offers rates as low as $5 a month.

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When should I consider gifting life insurance?

Gifts of life insurance can be a way to cover your loved ones on a policy that protects someone else you love as the named beneficiary.

This is a good option if the person you’d like to buy life insurance for can’t or is unwilling to buy a policy of their own. You can buy the policy for them and cover the people who depend on them.

Furthermore, you can also gift a life insurance policy death benefit to a charity by naming the organization as the beneficiary. This can be a way to make a memorable contribution as your last act.

Either way, there are some legal regulations and industry requirements that you’ll have to clear before you can get a life insurance policy on someone else.

Are there any life insurance gifting requirements?

If you plan to gift a life insurance policy, you’ll need to prove that you have an insurable interest in the person for whom you’re buying the policy.

Insurable interest is proof that you or someone close to you would suffer a loss if the insured person were to die.

Obvious examples of this might include close family, such as life insurance for grandchildren beneficiaries. Even business partners and close friends can fall under the scope of insurable interest, depending on the insurer.

Who can gift a life insurance policy?

Anyone who can prove that they have an insurable interest over another person can gift a life insurance policy. If you would be financially affected by the loss of someone, you can take out a life insurance policy on them.

Some examples of qualifying relationships include:

  • Family
  • Close friends
  • Business partners
  • Roommates

If a person’s death would cause you financial strain, you can likely get a policy in their name. As long as you pay the premiums, you’ll receive the death benefit when they die.

When should I gift life insurance?

There are many occasions where it would make sense to gift a life insurance policy to someone. Any big life changes that will cause a person to be more impacted by the loss of someone in their life is a good reason to buy a policy.

You might purchase a policy for someone else:

  • For a wedding gift
  • To welcome a new child
  • As a charitable donation

These circumstances, among others, will allow you to feel better about the future.

No matter who you designate as a beneficiary or for what reason you’re buying it, a comprehensive life insurance policy can provide a sense of security for you and the beneficiary.

A gift of life insurance could save someone from severe financial hardship in the future. Buying life insurance for grandkids can help ease the burden if they were to lose a part of their support system.

How to Gift a Life Insurance Policy

To gift a policy you’ll need to prove that you have insurable interest over the person that you’re taking out a policy on. If the insurer sees that you’d be impacted by the loss of that person, they’ll give you a policy.

One of the most common ways to gift life insurance policies is to buy them for children, as with the previously-mentioned Gerber Grow-Up Plan.

This will also help you get more affordable life insurance rates, as healthy children aren’t considered much of a risk to most life insurance companies.

Once you’ve gifted the policy, you’ll be responsible for maintaining the premiums on that policy.

If you’re trying to insure an adult, the rates will likely be less affordable and the insurance company may have a few more questions.

This stage of the process may consist of the simple underwriting conducted for all life insurance policies, or you may also need to get written consent from the individual. Life insurance companies that don’t allow gifting don’t want to worry about this extra liability.

How to Donate a Life Insurance Policy to Charity

You also have the option of gifting a life insurance policy to an entity rather than an individual. With a charity-owned life insurance policy, you’ll likely get to donate much more than usual.

This can make a lasting impact and serve as a positive final act. The added benefits of donating a life insurance policy include:

  • Additional value – If you were to donate all the money you pay in premiums, it would likely only be a fraction of the death benefit.
  • More affordable – Paying monthly premiums will be a lot more affordable than paying one large lump sum.

In this way, a life insurance policy can serve as a great way to donate to your favorite charity without breaking the bank with your donation.

If you want to donate a death benefit to your favorite charity, you can name them as the beneficiary on your policy. This will ensure that they get the payout from the policy when you pass away.

When you name the charity as the beneficiary, you’ll still have access to any cash value and investment features on the policy. This will allow you to still receive some return on your investment.

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What You Need to Know About Life Insurers That Allow Gifting

Gifting a life insurance policy to a charity or a loved one is a big decision.

As with all life insurance policies, you’ll want to make sure you do your research and consider speaking with a financial advisor to make sure you get the maximum value to the gifted beneficiary.

If you’re looking for quotes for life insurance companies that allow gifting, enter your ZIP code below into our free quote tool.