Very few individuals decide one day to write a check for $100,000 or more to their favorite charity. But with life insurance, it effectively can cost very little to be so generous. Life insurance enables a charitable individual to make a substantial future gift by making small premium payments over time.
The advantages of funding a charitable giving plan with life insurance include prompt payment of death benefits to the Foundation; giving without disrupting other assets reserved for your family; and qualifying for income, gift and estate tax deductions. However, depending on the gifting strategy you choose, some of these advantages may not be applicable.
There are many ways to make a gift to the SSCC Foundation through life insurance. One of the simplest is to name the Foundation as a charitable beneficiary to receive all or a portion of the proceeds of a current policy. Simply contact your insurance agent and tell him or her of your wish either to replace the existing beneficiary or name an additional one to your existing, in-force life insurance contract. In this case, you can't deduct the premium payments from your income taxes, but you maintain control of the policy and could decide to change the beneficiary at any time. For wealthy individuals, designating a charity as beneficiary would also have the potential advantage of removing the insurance proceeds from their taxable estate.
You also may purchase a new policy naming the SSCC Foundation as the beneficiary. In this case, you also own the policy and pay the premiums. Again, you can't deduct the premium payments, but you maintain control of the policy and could decide to change the beneficiary at some point. Another very simple way to make a current charitable gift through life insurance is to donate policy dividends from cash values to the Foundation.
A third approach would be to give the SSCC Foundation outright ownership of a paid-up policy. In this case, the present value of the policy would be deductible in the year given.
An additional option is to make cash donations to the SSCC Foundation for the purpose of purchasing life insurance. Under this scenario you expressly direct the Foundation to use your gift to purchase insurance on your life. This provides you with a current income tax deduction for your gifts while the SSCC Foundation pays the premiums, maintains ownership of the policy and receives the proceeds of the policy upon your passing.
To learn more about making a charitable gift through life insurance, please contact us.