Jayson Lowe warns against gifting whole-life insurance to kids because they often cash it out immediately instead of holding it long-term. Once you transfer ownership, you lose control and can't stop them from making that mistake. He says children should buy their own policies, like any other financial product.
So parents, if you're still on and you've got policies on your kids, please, I implore you, do not ever gift those contracts to your kids. I've seen, and again, horror stories, parents who their intentions are wonderful, they want to gift an asset to their kids. So they say, hey, I've been funding this policy, Billy, since you were born. You're 18 now. Here's the policy. Billy's gonna go, it has cash surrender value? Who do I call to get my hands on this money tomorrow? And that policy will be surrendered before you know it. And so the parents had every great intention, but there was an absence of communication or clarity somewhere, and Billy takes that asset that was gifted to him, which Rebecca and I will never do for our kids. That asset has value. If you want to own it, you're buying it. No different than what you would do outside of the family. And we've experienced those horror stories, and we can't go back to the parents because the moment that the ownership transfers, we can't talk to the parents anymore. So we can talk to the young adult and say, it would be foolish for you to surrender this, and the young adult's like, I've already made up my mind, surrender it. So parents, if you're still on and you've got policies on your kids, please, I implore you, do not ever gift those contracts to your kids. If you want to know how we do it in the way of letting our kids know how they can buy it, I'm happy to share that with you. But please, I implore you, don't gift it to them. You are setting them up for failure, not for success, even as well-intended as you are. God bless you for that, but don't gift them these assets. Remarkably, remarkably will end up being a big mistake. Want to find out more about how you can become your own banker? Click the link below or head over to learnwithjay.com. That's learnwithjay.com.
