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Gift of a Life Insurance Policy
Other than bequests, life insurance is the most popular type of estate gift. A gift of life insurance will enable you to make a significant future gift for a modest cost. This substantial gift can be made through a policy you already own, or through a series of affordable premium payments, without impacting assets intended for loved ones.
Your life insurance gift can be made in the following ways:
A current gift of life insurance:
- You give an already paid up policy to your charity of choice and receive a charitable donation receipt for its cash value
- You give an existing whole life policy on which premiums are still being paid, and in return, receive a receipt for the cash value of the policy and subsequent premium payments
- You purchase a new policy, transfer ownership to your charity of choice, and receive a tax receipt for all payments on the premiums
A deferred gift of life insurance:
- You retain ownership of the policy and name your charity of choice as the direct beneficiary and when you pass away, your estate will receive a receipt for the face value of the policy. This provides you with maximum flexibility, although you do not receive a receipt for premiums you have paid
- You establish a charitable insured annuity and use a portion of the payments to pay premiums on a life insurance policy that has been assigned to your charity of choice. You receive receipts for all premium payments. You may wish to purchase a second life insurance policy to replace the income invested in the annuity for your loved ones
- An annuity guarantees life income and can often be structured to increase your annual income while reducing your tax liabilities.