1. Jerry Vanderzanden, CLU, ChFCPRO
    Co-Founder, Coastal Financial Partners Group, California
    Yes, the policy owner has the right to transfer the policy to another owner. Care would have to be taken to ensure it is done without adverse tax consequences. We have often seen policy owners simply make the change directly with the insurance company only to find out later that the result was taxable.

    Depending on the facts and circumstances, the transfer itself can be taxable to the extend of gain and in many cases, a transfer might result in the death benefit being taxable when received. There are several ways that a transfer might be arranged such as by gift or sale. There are IRS regulations which set the value of the policy for tax purposes.

    Life insurance, tax and legal professionals can help you assess your situation to avoid traps so plan ahead before making changes.
    Answered on May 8, 2013

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