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L American General Life Insurance Company l The United States Life Insurance Company in the City of New YorkPolicy Ownership Transfer Affidavit member of American International Group, Inc. (AIG)In.

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In general, life insurance death benefits are exempt from taxation. If, however, you transfer a life insurance policy to another party in exchange for money or any other kind of material consideration, the death benefit proceeds may become fully or partially taxable. This is known as the transfer-for-value rule.

If you transfer a cash value life insurance policy to someone and it's worth more than the exclusion limit, it's considered a taxable gift. If the new owner of the policy is required to pay ongoing premiums to maintain it, you can still gift them up to $16,000 to cover the cost without a penalty.

The new owner will need to go through an underwriting process with the life insurance company, just as you did when you originally purchased the policy. This process will vary depending on the insurer, but generally speaking, the new owner will need to provide some personal information and answer medical questions.

If you own a policy on your life, you may want to transfer ownership to another individual (e.g., to the beneficiary) to avoid inclusion of the proceeds in your estate. Transferring ownership of a policy is easy: Simply complete a change-of-ownership form provided by your insurance company.

Can ownership of life insurance be transferred? Sure! But there is a serious tax trap for the unaware – if transferred improperly, the policy proceeds may constitute taxable income to policy beneficiaries (this is called the “transfer for value” rule).

There are two options when it comes to transferring a life insurance policy: Transfer ownership of your policy to any other adult, including the policy beneficiary (in this case, your child or children). Create an irrevocable life insurance trust and transfer the ownership of the policy to the trust.

The new owner will need to go through an underwriting process with the life insurance company, just as you did when you originally purchased the policy. This process will vary depending on the insurer, but generally speaking, the new owner will need to provide some personal information and answer medical questions.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232