A Gift of Life Insurance
Many individuals own life insurance at some time in their lives. A life insurance policy may be purchased to provide peace of mind, financial liquidity, investment diversification, or an inheritance to loved ones. As an individual’s situation changes over time, however, the life insurance policy may no longer be needed for its original purpose. An individual with philanthropic intent may decide to make a charitable contribution of the life insurance policy. Or, a donor may choose to purchase a new policy to specifically help a favorite non-profit organization.
There are several ways to structure a gift of life insurance to benefit Brophy College Preparatory:
Change the Beneficiary on All or Part of an Existing Policy – In this case, the donor will retain full control of the policy during his or her lifetime, with Brophy receiving the insurance proceeds at the donor’s death. While the donor would not receive a charitable income tax deduction, there is one positive tax aspect. The donor’s estate should be entitled to a charitable estate tax deduction for the amount transferred to Brophy. Brophy has relationships with a group of insurance professionals who can help if you should need assistance in completing the appropriate paperwork to make this designation.
Make an Outright Gift of an Existing Policy – Here, the donor irrevocably transfers ownership of the policy to Brophy. An outright gift generally will produce a charitable income tax deduction equal to the donor’s basis in the policy. Again, if you need assistance with this type of transaction, Brophy knows insurance professionals who can help you.
Purchase a New Policy and Make Brophy the Owner and Beneficiary – This is another straight-forward way to make a legacy gift. The donor is able to deduct premium payments as charitable contributions for as long as the premiums are paid. In addition, the life insurance policy proceeds would not be included in the donor’s estate for tax purposes. Brophy can again put you in contact with an insurance professional to provide help if you need it.
Simplicity is one of the major advantages of life insurance gifts. Should you decide that this is right for you, please let us know about your generosity. Please contact Joe Helm,
Director of Planned Giving, at email@example.com or at
602-264-5291, ext 6430.