Life Insurance for Legacy: Utilizing Permanent Policies for Charitable Giving

Permanent Life insurance is an exceptional tool for philanthropic giving, allowing individuals to create a significant charitable legacy with relatively modest premium payments. This strategy is especially appealing because the gift is guaranteed, reliable, and often much larger than the donor could give today.

The Strategy: Assigning Ownership to a Charity

The most common method involves making a charity the owner and beneficiary of a Whole Life policy. Key advantages include:

• Large Future Gift: The charity receives the full death benefit, a substantial amount guaranteed by the permanent nature of the policy.
• Tax Deductions: If you transfer an existing policy or buy a new policy and name a qualified charity as owner/beneficiary, you may be eligible for immediate tax deductions for the cash value (if transferring an existing policy) and/or for future premium payments you make.

Donor Advantages

This strategy allows donors to leverage premium dollars into a massive final gift while still being able to utilize the cash value (via policy loans) until the policy is formally assigned to the charity.

Disclaimer: This content is for informational purposes only and is not financial or legal advice. Charitable giving strategies involving life insurance have specific tax rules; consultation with a qualified tax advisor and the receiving charity is essential.