Community as your beneficiary.
Life insurance provides a simple way for you to give a significant gift to charity and establish your legacy, with tax benefits that you can enjoy during your lifetime.
You can make a gift when life insurance is no longer needed for personal financial wealth replacement by either giving a paid-up policy or continuing to pay premiums. You may receive a number of tax benefits, including reduced estate and income taxes. And, if you choose to continue paying premiums through your community foundation, you will be entitled to a charitable contributions deduction of up to 50 percent of your adjusted gross income.
You can replace the dollar value of an asset transferred to your community foundation with a life insurance policy. Or, you can use regular payments from a Charitable Gift Annuity or Charitable Remainder Trust to establish an irrevocable life insurance trust. The trust can purchase insurance on your life to benefit your heirs. This way, you can make a gift to your community foundation and replace the value of this gift within your estate with life insurance proceeds.
Example Donor Story
A gift that pays.
When his two daughters were young, Zachary Ding bought a life insurance policy to provide for his family in the event of his death. Now, he’s 65, and things have changed. “My daughters are both grown and doing very well for themselves, and over the years, my wife and I have become fairly comfortable—she will no longer need the death benefit from my policy,” says Zachary. The Dings support and volunteer for a youth mentoring program, as well as their local museum. “We’ve always planned to leave something for important community organizations when we pass,” says Zachary. After talking with their financial planner, Zachary decided to give his life insurance policy to his local community foundation. “After giving my policy, I received a significant charitable tax deduction,” says Zachary. “We had owned the policy for so long that we could choose to stop paying the premiums and maintain a sizable death benefit.” The Ding Fund will be established with proceeds from the insurance policy to benefit youth development and other community organizations.
There is so much more we’d like you to know. For more information and ideas on ways to integrate your financial planning with charitable giving, ask your financial advisor or contact Tami Wenning at email@example.com.