top of page
  • Writer's pictureBogress Financial Group

Intergenerational Wealth Transfer with Permanent Insurance

You already have excess wealth that you plan to pass on to the next two generations. You want them taken care of financially and have likely earmarked a portion of your investment portfolio for them. One issue that arises is that all non-registered investment growth is eroded by taxation.

A tax-free permanent insurance policy can make sure your financial legacy extends all the way to your grandchildren.

Have you considered a generational wealth transfer using permanent life insurance? You can take out an insurance policy on your adult children and investment growth in these plans is not subject to annual taxation, increasing your overall wealth. As the owner of the plan, you control money growing inside and can access it during your lifetime if needed.

Your Child

When you purchase the plan and insure your child, they have a valuable asset right away: life insurance protection. You can transfer the policy to them at any time tax free, however most people will transfer the policy at the time of their passing. This is done seamlessly by naming them as a contingent owner on the plan. As the new owner, they now have access to all the money that is growing inside the policy. This money can be used to help buy a home, supplement their retirement, or help fund their child’s education.

Your Grandchild

By naming them as the beneficiary on the policy, you have helped put a foundation in place they can build on. As the named beneficiary on the policy at the time of your adult child’s death (hopefully well into the future) your grandchild will receive the death benefit proceeds tax-free.

This is a great way to help extend your financial legacy. You worked hard to earn it. Make sure your loved ones are the beneficiaries.

11 views0 comments


bottom of page