Section 72 Life Insurance is a type of Life Insurance that parents buy in Ireland to pay their children’s inheritance tax bill. It’s called S72 because it’s defined in Section 72 of the Capital Acquisitions Tax Consolidation Act 2003.It works much the same as regular Life Insurance in that you take out a policy, you pay your premium, and when you die, your benefactor gets a tax-free lump sum. In this case, they’ll use it to clear the inheritance tax.Benefactors. Inheritance tax. We’ve gone a bit notiony here.Next thing you know, we’re all going to be doing the big shop in Donnybrook Fair and paying €27 for a sandalwood candle.The caveat here is that Section 72 insurance has to be taken out on the person leaving the inheritance.It’s a bit like taking a hit out on yourself, except to insurers, and not, you know, the mafia. You also have to pay the premiums.All of this is to say that your kid, i.e. the benefactor, can’t take a Section 72 policy on your behalf.BUT!They can gift you up to €3000 tax-free using the small gift exemption.You can then use this gift to pay the premiums on your policy. The beneficiaries will be getting the benefits of the policy so it’s only fair they pay for it or at least contribute.