As Americans, we can take pride in the fact that we are a nation of givers. And as the economy improves, charitable giving is on the rise. In fact, according to the Indiana University Lilly Family School of Philanthropy, in 2013 total charitable giving from U.S. individuals, corporations, foundations, and bequests exceeded $335 billion.
But with money still being tight for many Americans, it’s nice to know that there is a way to support a favorite charity without having to worry about the impact it could have on your budget. How? By giving the gift of life insurance. Here are just a few ways you can use this proven method to contribute money to your favorite causes:
- Donate an existing policy—If you already have a policy and no longer need the death benefit, you can irrevocably transfer ownership of the policy to your desired charity. While the charity will be responsible for any remaining premium payments, it will also receive the full death benefit when you die.
- List the charity as a beneficiary—As the owner, you remain in control of your policy and can leave money to as many beneficiaries as you like: children, grandchildren—even multiple charities. Or you can name a single charity the sole beneficiary, and it will receive the entire amount.
- Purchase a separate policy—There are times when it makes sense to have separate policies: one for loved ones, and one for charitable gifts. This technique can prove especially helpful if you would like to retain ownership of one policy, but not the other.
- Create a Charitable Remainder Trust: While this planned-giving tool is designed to shelter assets such as stocks and real estate, you can also incorporate life insurance if it’s set up correctly. Be sure to consult a trust attorney before pursuing this approach.
Giving life insurance can be a lasting and recession-proof way to support a worthy cause. Depending on the method you choose, it may also offer a variety of tax benefits.
This educational, third party article is provided as a courtesy by Kyle Skipper, Agent, New York Life Insurance Company. To learn more about the information or topics discussed, please contact Kyle Skipper at [email protected]
Neither New York Life Insurance Company nor its agents provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professionals before making any decision. Also, state laws vary with respect to charities and insurance. Please consult your legal advisor for details.