Life Insurance for New Grandparents: Building a Legacy

Becoming a grandparent is a joyful milestone—one that brings with it new roles, responsibilities, and reflections on legacy. Many new grandparents want to provide financial support to their grandchildren, and life insurance is a powerful, often underutilized tool to help them do just that.

Why Life Insurance Matters for Grandparents

Grandparents play a pivotal role in their family’s future, both emotionally and financially. Life insurance offers a unique way to:

• Leave a lasting financial legacy

• Provide peace of mind for loved ones

• Support educational or caregiving needs

• Help cover estate taxes and final expenses

Key Life Insurance Strategies for Grandparents

1. Purchasing a Policy on ThemselvesA traditional strategy is to buy a permanent life insurance policy on themselves. This ensures that a tax-free death benefit will go to designated beneficiaries—often children or grandchildren.

2. Funding a Policy for a GrandchildAnother thoughtful approach is buying a whole life policy for a grandchild. It builds cash value over time and locks in insurability at a young age.

3. Gifting Premium PaymentsGrandparents can also contribute by paying premiums on policies owned by their children or grandchildren. This can be a meaningful and tax-efficient gift.

Choosing the Right Policy

Whole Life Insurance: Offers guaranteed cash value accumulation and death benefits, ideal for long-term planning and gifting.

Universal Life Insurance: Provides flexible premiums and adjustable benefits, suitable for those wanting to customize coverage.

Survivorship Life Insurance: Covers two people (typically spouses) and pays out after both have passed, often used for estate planning.

Tax and Estate Planning Benefits

Life insurance can help with:

• Reducing estate taxes

• Equalizing inheritances among heirs

• Creating liquidity to pay debts or taxes

Consulting a financial advisor or estate planner is crucial to structure policies efficiently.

How to Talk to New Grandparents About Life Insurance

1. Focus on LegacyFrame the conversation around values, legacy, and the desire to support future generations.

2. Highlight FlexibilityExplain how life insurance can adapt to various family needs—education, caregiving, or wealth transfer.

3. Share Success StoriesUse real-life examples to demonstrate how grandparents have used life insurance to make a difference.

4. Offer a ReviewEncourage a policy review to ensure current coverage aligns with their new family dynamics.

Myths Grandparents May Believe

“I’m too old to get life insurance.”Many insurers offer coverage well into one’s 70s, and even 80s, especially for final expense policies.

“I don’t need more insurance now.”Even if coverage isn’t needed for debts or income replacement, it can serve as a legacy tool.

“It’s too expensive.”Smaller whole life or final expense policies can be affordable and impactful.

Tips for Insurance Agents

• Send a “New Grandparent Congratulations” card with a personalized insurance review offer.

• Host webinars or workshops on legacy planning for grandparents.

• Collaborate with estate planners to provide holistic advice.