Three Ways to Donate Life Insurance

Your need for life insurance most likely declines with age, increasing its popularity as a charitable gift.

1. Let it go. An outright gift of a paid-up life insurance policy makes an excellent charitable gift. your favorite charitable organizations will either take a policy's cash value or retain the policy for its ultimate death benefit. You receive a current deduction amounting to the cost of replacing the policy with a single premium life insurance policy at your current age (but not more than you've invested in the policy).
2. Start anew. You can take out a new policy with us as owner and beneficiary. Your continuing premium payments, usually gifted directly to charitable nonprofits, are income tax deductible.
3. Pay the premiums. You can also donate an existing policy and keep up the premiums. If you should lapse on the payments, charitable nonprofits can either receive the current surrender value of the policy, buy a smaller, yet paid-up policy with the policy's cash value or possibly even continue the premium payments for the life of the insured. Group term life insurance or employer group coverage above $50,000 also make suitable gifts to charity.

Because gifts of life insurance are usually gifts of ordinary income, the gift amount is deductible up to 50 percent of your adjusted gross income. If necessary, you may carry over the deduction for an additional five years.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

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