Image via WikipediaFinancial IQ Philippines Quick Hit(s):
Anyone can purchase life insurance for anyone (including god children, etc).
Is it okay to give life insurance as Christmas gifts to godchildren? My husband and I have many godchildren, and since I read your Question & Answer series on savings and life insurance, I’m curious to ask if godparents can buy and give life insurance as gifts but pay only the premium for the first year and then their parents pay the following years? Is this unusual, allowed or not?
Irene Ong-Cheng, 47 years old, businesswoman, Zamboanga
Answer
Yes, godparents can surely pay for the initial premiums of an insurance policy as a gift to his/her god child. The god child may be the person insured under an insurance policy that provides for benefits during his/her lifetime such as periodic monetary benefits (which are usually called “living benefits” that may be used for the child’s particular needs such as education). His/her parents may be the designated beneficiary/ies in the policy. Alternatively, the child can be the beneficiary in a life insurance policy on the life of either of his/her parent. In either case, since the succeeding premiums are to be paid by the parent upon his/her approval, then the said parent shall be the Applicant-Owner of the insurance policy who shall be entitled to specific rights including, among others, the right to receive “living benefits.”
You may also consider securing a One-Pay Life Insurance Policy which requires only a single premium payment.
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