Buying Life Insurance for Grandchildren

Grandma with two grandchildren baking a recipe together

As a grandparent, your grandkids are probably an insanely big part of your world. And at Quility, we know that your job goes way further than providing copious amounts of treats that mom or dad may not let them normally have (although that’s a pretty important part of your job description too).

More than anything, you most likely want to do everything you can to ensure that your grandchildren have a bright future, but what you may not know is there are a few tools out there that would not only make this possible but incredibly easy.

While it may not be the first thing that comes to mind, buying a life insurance policy for your grandchildren can provide financial protection and peace of mind for both you and your family. Investing in an annuity can also have a lot of these same benefits, and today we’re going to discuss both of these options. (And then we promise we’ll let you get back to sugaring up those kiddos.)

Choosing a life insurance policy for your grandchildren

When it comes to choosing a life insurance policy for your grandchildren, the best option is a permanent, whole life policy. Whole life policies do just what they sound like – provide coverage for the lifetime of the insured individual. So as long as the premiums are paid, the policy will remain in force, regardless of any changes in your grandchild’s health or circumstances.

This is an especially good option if the child the policy is being purchased for has a medical condition that would make it difficult for them to quality later in life on their own.

An added bonus of a permanent, whole life insurance policy for our grandchild is that it accumulates cash value over time. In the future the policyholder can borrow against this cash value or withdraw it, providing an additional source of funds for unexpected expenses or emergencies.

Investing in an annuity

Another option to consider that shares many of the same peace of mind benefits is investing in an annuity as your retirement solution. You can then use the funds from that annuity to help your grandchild with a myriad of life expenses, from college tuitions to mortgages to so many things in between.

An annuity creates a guaranteed source of income for your grandchild’s future, with no guesswork or mystery when it comes to the amount that will be there waiting for them.

Additionally, annuities can offer flexibility in terms of when and how the income is paid out. You could choose to defer payments until your grandchild reaches a certain age or needs the funds for a specific purpose. Or you could allow a lump sum payout to happen immediately.

And as an added benefit of investing in an annuity for your grandchildren, the funds are not subject to estate taxes. This means that your grandchild will receive the full amount of the annuity payout without any deductions.

A permanent life insurance policy or an annuity: which is best?

The good grandparents want to be there to watch their grandchildren grow and develop, celebrate their achievements, and offer guidance and support when they need it. But the truly great ones do what they can to make sure that will happen even after they’re gone. And with a plethora of options to choose from at Quility we’re here to help you be one of the great ones.

Ultimately, the decision of whether to purchase a permanent, whole life insurance policy for your grandchild or an annuity with them in mind will depend on your individual needs and preferences. If you are looking for coverage for your grandchild’s entire life and want the flexibility to access cash value if and when it is needed, a permanent, whole life insurance policy through Quility may be the right choice.

If you are looking to create a guaranteed source of income for your grandchildren in the future, an annuity may be your best bet.

Let’s chat!

Ready to gain some financial protection and peace of mind for both you and your family? Whether you decide to purchase a whole life insurance policy for your grandchildren or invest in an annuity, you should give yourself a huge gold star for taking the first steps to ensure your grandchildren will be taken care of.

We know it can feel a bit overwhelming, but regardless of which option you choose, it is important to carefully consider your goals and objectives, as well as the costs and benefits of each option, before making a decision.

Lucky for you, the team at Quility can help you do just that! By taking the time to carefully evaluate your needs and letting us show you all the available options, you can help ensure that your grandchild is protected no matter what the future may bring.

Ready to invest in an annuity (retirement solution) or permanent policy so that you can use the funds to help your grandchild pay for college, a mortgage, etc.? Let’s chat!

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Calie Brummer
Head of Digital Communications
Calie Brummer is a staff writer and Head of Digital Communications at Quility Insurance with a focus on financial well-being and life insurance solutions.