Gifts of Life Insurance Many people purchase life insurance to protect their growing families. When that need no longer exists, they can name GCF as the beneficiary of the policy.
Alternatively, a gift of life insurance can be made by naming GCF as the owner and beneficiary of an existing or new life insurance policy. Annual gifts may be made to GCF to cover any insurance premium due. Such contributions are eligible for an income tax charitable deduction.
For example, when his children were small, Peter Wilson purchased a $ 50,000 whole life insurance policy on his own life to guarantee funds for his children’s education. They have since graduated and are now financially independent, yet Peter still owns the policy and pays the $1,000 annual premium. The policy’ s replacement value is $22,000 and the net cost equals $23,000. Peter decides to assign the policy to GCF. He is in the 39.6% tax bracket so he realizes an immediate tax savings of $8, 712 on his charitable gift. Peter continues to pay the $1,000 annual premium and receives an additional charitable tax deduction each year. Moreover, the $50,000 proceeds are removed from his taxable estate.
Life insurance gifts may actually enable a donor to make a much larger gift than he or she might have thought possible, since a gift of paid up life insurance will not reduce the donor’s income.
The Foundation Society recognizes people who have remembered GCF with a bequest in their will or other type of personal gift. For more information see: The Foundation Society: Recognizing Legacies.
