Life insurance and skipping a generation
Skipping a generation means passing on an inheritance to the second generation. What is the point of skipping a generation under a life insurance policy and how does it work?
- To bequeath part of this cash directly to his 9-year-old grandson
- That his grandson may not dispose of these inherited assets until he is 25 years old
Takes out a life insurance policy drafted to include a specific beneficiary clause with one certain condition, namely:
A beneficiary clause with the obligation to reinvest the death benefits in a life insurance policy and a temporary inalienability clause under which surrenders are blocked until the subscriber's 25th birthday).
On the death of the insured
Profits from the policy are reinvested in a new insurance policy for which the policyholder/insured is the grandson.
Beneficiaries must be the legal heirs.
On the grandson’s 25th birthday