A Gift of Life Insurance

Life Insurance (charitable organization as beneficiary):

Donor names charitable organization as beneficiary of life insurance policy.

Benefits:

• Donor retains ownership of policy and has access to its cash value;
• no federal estate tax on life insurance proceeds will be due upon donor's death because of charitable deduction.

Life Insurance (charitable organization as owner):

Donor irrevocably assigns life insurance policy to charitable organization.  Each year donor contributes annual premium amount to organization to allow it to pay subsequent premiums.

Benefits:

• Income tax deductions for lesser of policy's value or net premiums paid
• income tax deduction for subsequent contributions.

Life Insurance (wealth replacement):

Donor has transferred property to charitable organization and uses tax savings produced by the income tax deduction to pay premiums on life insurance policy, the proceeds of which will be roughly equivalent to the value of the gifted property.

Benefits:

• Provides funds to family beneficiaries in compensation for the property contributed to charitable organizations.