Millions of Americans make donations of cash and property to the charities of their choice each year. However, while these donations can provide valuable tax deductions, many donors are left wishing that they could do more for the charities that they love and support. Some donors would therefore be wise to consider using their life insurance policies as a more effective means of leveraging the support they provide. In many cases, this can be the most effective and convenient asset that they can give.
Benefit of Policy Donations
Policy donations also provide a much greater benefit to the donor as well as the charity. The charity will receive the entire face amount of the policy upon the death of the insured. However, the cost to the donor will only be a small fraction of that amount each year, and any premiums paid after the date of the gift will be deductible as well.
Naming a Charity as Beneficiary
Naming the charity of your choice as the beneficiary of your life insurance policy is the simplest way to provide a charity with the death benefit proceeds from a policy. Donors who are unsure of exactly how they want to apportion their assets after death can list a charity as a revocable beneficiary if they so choose. This gives them flexibility in future planning in case their financial situation changes.
Naming a charity as a beneficiary also ensures the privacy of the transaction, which can be important for donors who wish to keep their gifting intentions secret from their families or other heirs. If the donor chooses to stop paying the premiums, the charitable organization can choose to continue the process or can allow the policy to lapse.
Conclusion
Donors who wish to leverage their cash donations to charity can use life insurance as an excellent means of accomplishing their goal. By either gifting (assign) a policy outright or naming a charity as beneficiary, they can provide the charity of their choice with a large sum of money that can provide a lasting legacy and help others in need. For more information on the use of life insurance as a gifting tool, consult.us today.
