3 ways to help a charity with a gift of life insurance

3 ways to help a charity with a gift of life insurance -
We are a charitable nation. Over 95% of American households give an average of just under $ 3,000 per year to charity. This means you probably do, too. But did you know that there are other ways to give to charities by simply writing a check?


Regardless of your reasons to give a gift of life insurance can be a substantial future gift to a favorite charity relatively little cost to you. There are several ways you can accomplish that
1. a recipient charity of an existing policy: If you have a life insurance policy, you need more support your partner or family, you can name a charity as the beneficiary of the policy, which means that the charity will receive the death benefit from the policy when you die. Although there is no current tax benefits to this approach, the value of the policy will be removed from your estate for federal estate tax.
2. a charity the owner and beneficiary of an existing policy: Instead of just naming the charity as beneficiary of an existing life insurance policy, you transfer full ownership of the agency policy. The charity will receive the death benefit from the policy when you die. In addition to eliminating the value of the policy of your estate for purposes of federal estate tax, this approach also provides current federal tax deductions.
3. Help a charity purchasing a new life insurance policy on your life: If you want to make a substantial future gift to a charity at a relatively low cost to you, another alternative is to consider purchasing a new life insurance policy and name the charity as the policy owner and beneficiary. You then have to pay the premiums, donations to the charity. This approach provides tax deductions for federal income and the proceeds of the policy are not included in your estate for federal estate tax
Important note :. Most states through their laws "insurable interest" to allow a charity to be the owner and / or beneficiary of an insurance policy on the life of a donor. Since state laws do vary, however, it is important to seek professional advice before making a life insurance donation to a charity.