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A Grandparent’s Gift of Enduring Love.

How to leave a memorable legacy?

A 73 year- old grandfather and his 71 year-old wife, wanted to leave gifts to their 3 beloved grandsons (aged 10, 8, and 5), that they won’t outgrow, break, squander or forget about.

The grandfather had done a great job preparing for their own retirement security, by saving and investing over the long term, and living on a combination of their pension, Social Security, and current consulting income. However, they do not have any long-term care funds earmarked, and don’t want to spend down their retirement assets in case one or both of them experience a long-term care event.


The grandfather bought 3 New York Life custom whole life policies on each of his grandsons through his revocable trust. He spends $1500 per year on each of these policies. He is done paying for the policies after 12 years, for a total investment of $18,000 per grandchild over that 12-year period. The trust can continue to pay the premiums if he passes away in the interim.

By the time the youngest grandchild attains normal retirement age at 67, he should have over $210,000 in immediately accessible cash value to supplement his retirement income, say for travel or doing “bucket list” activities in memory of his grandpa. (The older 2 grandsons get slightly less benefits because they are a few years older, and have slightly higher mortality costs).

At this point, the grandfather has essentially multiplied his gift 12.9 times, just by placing those 12 annual $1500 gifts inside an insurance wrapper that allows those funds to grow tax-free each year until his grandchild’s normal retirement age.

In the interim, each grandchild has an appreciating asset, which he can use for supplemental college expenses or a car. Each grandchild essentially has a private “piggy bank” from which the grandfather can loan him money. The grandchild pays back his grandfather’s trust, rather than a third party lender, restoring the full value of his policy’s death benefits and cash values upon loan repayment. This teaches his grandchild responsibility from an early age.

By the time the grandchild reaches his grandfather’s age, he should have over $480,000 in death benefits for his own family, based on the current dividend scale. By age 100, those death benefits will have grown, under the current dividend scale, to some $728,000—40.4x more than the $18,000 his grandfather invested for him when he was just a kid.

That is truly a gift his grandchildren will never forget and a fitting family legacy from the one who started it all.