Charitable Giving With Life Insurance

1. Planned Giving Solutions
Leveraging Your Charitable Gift with Life Insurance
Often times your desire to make a charitable gift exceeds your financial capacity to do so.
You feel good about what can be accomplished with the funds and you have a strong
relationship with the charitable organization, but you feel that making a substantial
irrevocable gift at this time is beyond your means. Using life insurance as a charitable
giving tool may be the answer.
There are a number of ways in which life insurance can create substantial charitable gifts
with minimal outlay by the donor.
Gift of an existing paid-up life insurance contract
At one point in your life it was prudent to purchase a life insurance policy to protect the
financial interests of your family. If the need for that policy is no longer there it may be
donated to the charity of your choice. At your death the insurance proceeds will be made
payable to the charity. There are also tax advantages that may be realized which can actually
make the transaction positive from a cash flow standpoint.
Gift of premiums
There are a number of advantages that a charitable organization receives from purchasing
life insurance on a donor’s life. If making a substantial gift today is beyond your financial
means, making smaller annual donations that the charitable organization can use to pay
insurance premiums is a good way to leverage your gifts into a much larger contribution.
Naming a charity as beneficiary
If the idea of leveraging smaller annual contributions into a larger substantial gift is of
interest to you, but you’d like to retain the right to change the charitable beneficiary or for
financial reasons the gift needs to be revocable - purchasing a life insurance policy may be
an appropriate solution. You own the policy on your life, make annual premium payments,
and name a charity as the beneficiary. If your financial situation changes, you can increase,
decrease or stop the premium payments all together. Also, if your intentions change and
you’d like to support additional charities, simply add them to the list of beneficiaries.
This presentation is not intended as legal, tax or accounting advice. All planning and design alternatives should be discussed with your legal, tax and accounting advisors/professionals.