Tools For Giving Later
Gifts of Life Insurance
What are they?
There are two good and easy ways your clients can use life insurance to fund their giving. If they have a paid-up (or cash value) life insurance policy that they no longer need for its intended purpose (e.g., children are grown, their spouse is pre-deceased, or tax laws have changed), they can give the policy to a fund at The Community Foundation. The policy will be cashed in, and they can use the proceeds to make grants to charities they recommend immediately. Or, they can make life insurance part of their estate planning by naming the Community Foundation as a partial and/or contingent beneficiary of any insurance policy's death benefit. If one or more of their primary beneficiaries predecease them, their share can go directly into a fund they establish at The Community Foundation.
Highlights
- When your clients make an immediate gift of an insurance policy, they may claim an income tax deduction based on the policy's current value. The Community Foundation can cash in the policy and have proceeds go directly into the fund they establish. Or, they can convert the assets of the policy into a charitable remainder trust.
- Your client reduces estate taxes, since the value of the policy is removed from their estate.
- Naming The Community Foundation as the beneficiary or contingent beneficiary of their life insurance enables them to protect their loved ones while providing for the causes their care about if the policy's beneficiaries predecease them.
- They remove an unneeded asset from their estate-without affecting their income.
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