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Gifting Life Insurance Policies

By Marilyn Katz

Republish: EasyPublish™
Published: 22Dec2011
Word count: 436
Viewed: 67 time(s)

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Many people do not realize that they can get a lot of benefits out of giving life insurance policies to a favorite charity or foundation. This allows the giver to maximize the money they can leave the worthy cause, and it may give them some financial benefits they can use as well. If you would like to endow a worthy organization, learn more about giving away life insurance!

What life insurance policy can you give to a charity? You could purchase a new policy. In this case, you will probably want to take the time to get online insurance quotes to make sure that you get affordable rates. You could also add the charity as a beneficiary to an existing policy. In this case, you could give some, or all of the proceeds to the charity. You are allowed to split the proceeds from a life insurance policy between multiple beneficiaries.

This allows you to maximize your contribution. Consider an example. Let us say that you are a fairly health 50 year old, and you could afford to give your charity $50 a month. That works out to $600 a year. For this example, we will assume you will live to be 80 years old. That means you would give your charity about $18,000 over the course of your life. However, you may be able to use your contribution to fund a life insurance policy of several times that amount.

Even if you had the whole lump sum of $18,000 today, you could still fund a life insurance policy that would multiply this contribution.

You could also use a life insurance poilcy in another way. You could keep your family happy if you decide to make a gift out of some assets you own. If you want to donate property, vehicles, etc. to a favorite charity, you could compensate your family with the cash proceeds from a policy.

The IRS tax rules that govern these types of transactions are complicated. In addition, each state has their own rules. But you may be able to realize some current and future tax deductions too. You may save money on income taxes. In the future, your family members could be able to save on estate taxes too. You should consult with a tax expert before you make a final decision so you understand how it will affect you.

You may not have thought about gifting life insurance policies before. However, it can benefit you, and it can benefit your favorite charity or organization!

Explore the benefits of gifting life insurance policy proceeds. While you are on our website, you can also get competitive life insurance rates.

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