Thinking about opening an Indexed Universal Life (IUL) policy for your grandchild?

You’re not alone—many grandparents are starting to see the long-term benefits an IUL can give the next generation. But before you start, it’s important to know some key rules.

Steps to Secure an IUL for Your Grandchild

Application Basics On An IUL For A Child

When you get an IUL for a grandchild, you are the policy owner, but your grandchild is the one insured.

The insurance company looks at your grandchild’s health since that’s who the coverage is for. So, your grandchild will need to pass a health and background check, just like an adult would.

Rule When Getting An IUL For A Minor

Insurance companies want to see that you, the grandparent, have your own life insurance before you buy one for your grandchild. If you don’t have life insurance, the company won’t approve the new policy.

The amount you can get for your grandchild must also be less than your own life insurance coverage. If you don’t have a policy yet, you can get one when you apply for your grandchild’s coverage.

Parental & Sibling Considerations For An IUL For A Grandchild

If your grandchild has siblings, similar life insurance coverage is required for all of them. Insurance companies don’t let just one child in a family have a policy if others don’t.

Also, at least one of your grandchild’s parents must agree with the policy—you’ll need their signature unless you’re the legal guardian. This is to make sure everyone is protected and there’s no foul play.

IULs are flexible. You can use them for many things—future college costs, down payments, or emergency savings for your grandchild. You just need to meet these main rules before opening an IUL policy for a minor family member.

FAQ: Can You Get an IUL for a Grandchild?

1. How old does a child need to be to get an IUL?
Most insurance companies allow you to open an IUL for a newborn or child under 18, but they will always check the child’s health and family situation during the application process.

2. Why get an IUL for a grandchild?
Grandparents often choose an IUL for tax advantages, savings growth, and long-term protection. It can help with college, a first home, or act as a financial safety net.

3. Who can own the IUL policy for a grandchild?
Usually, the grandparent owns and pays for the policy while the grandchild is under 18. At least one parent has to approve and sign off, unless the grandparent is the child’s legal guardian.

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