How to Transfer Life Insurance Ownership
Often times the owner of life insurance policy is the person whose life is insured. Owners can however include; parents, spouses and corporations. Once a contract is taken out there are varying circumstances where a policy holder would elect to transfer ownership to another person. Below are a few examples;
- A child comes of age to assume the responsibility of managing their own policy.
- A parent/grandparent that may not be able to manage their financial affairs.
- To provide security for a loan
- Transfer ownership to a charity
The process of transferring ownership is relatively simple. The current owner(s) will need to sign off on a change of owner provided by the insurer along with the signatures of the new owner(s).
Typically, when transferring from one person to another the form will require the following information from the new owner;
- Legal Name
- Date of birth
- Postal Address
- Social Insurance Number (SIN)
- Relationship to the previous owner and to the life insured
- Verification of identity, such as a birth certificate, passport or drivers license
- Determination of Third Party Interests if applicable (jurisdiction, incorporation number, etc.)
To change the owner the form would need to be sent to insurance company for approval. Additional forms may be needed if there is a change in the payment method, bank accounts and beneficiaries. If an irrevocable beneficiary is stipulated in the insurance contract, the irrevocable beneficiary would have to sign off on any changes to their allocation.
Should a new copy of the policy be needed, the insurance companies typically charge a fee for a policy replacement range from twenty to fifty dollars.