It's better to give than to receive, and there's no better feeling than giving charitably. Charitable giving is a primary objective for those who wish to leave a legacy and pass on a portion of their assets to a favorite charity, church or other not-for-profit organization. It’s a great way to be remembered as someone who really cared.
Personal life insurance is a planning tool that can be utilized to effectively increase your gift to a chosen organization. By using a life insurance policy to accomplish this objective, there are significant financial benefits for the charity receiving the gift and you giving the gift.
The charity will receive a sizeable guaranteed gift that it otherwise would probably not receive. It won't fluctuate as it might if it consisted of a stock portfolio. If the policy is an outright gift, the charity has access to the cash value and dividends even during your lifetime. Death proceeds of a life insurance policy are not subject to federal income taxes, so the charity will receive the entire face amount of the policy. Life insurance proceeds do not pass through probate, so the charity avoids both time and cost in collecting the gift. You may receive a current income tax deduction for the annual charitable gift that in turn funds the premium payments.