Life Insurance gifts
Many of our friends have found life insurance the ideal vehicle for making a significant charitable gift, either during life or at death. Consider the advantages:
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Life insurance gifts are simple; just ask the insurance company for the appropriate forms to make us owner or beneficiary of a policy.
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Gifts of a policy are tax deductible, as are future premium payments.
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A gift of life insurance is certain. The full proceeds are payable to ensure your philanthropic goals are achieved.
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Life insurance is paid promptly; it is not tied up in the administration of the estate.
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Unlike a will, life insurance is not a matter of public record. Proceeds for Greenpeace can pass in privacy, if you desire.
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Life insurance can be used to make significant gifts to charitable causes like Greenpeace, with exceptional tax advantages.
Here are a few ways life insurance can be used to enlarge your support:
A Gift of an "Unneeded" Policy
Suppose your family is grown and no longer needs a policy purchased many years ago. You could make Greenpeace the beneficiary of that insurance policy and take a tax deduction for the value of the policy at the time of the gift.
Let's assume further that you have a $50,000 policy on which you are still
paying, and the cash surrender value of your policy is $20,000 and the premiums
cost $500 annually. If you contribute the policy to a non-profit organization
like Greenpeace and continue paying the premiums, you will be entitled to an
income tax charitable deduction of about $20,000, reducing your taxes by $6,200
if you are in a 31% tax bracket. In addition, each year you will be entitled to
another $500 deduction for the annual premiums you pay, saving $155 in income
taxes. At your death, the full $50,000 proceeds will be used for Greenpeace
programs.
"Wealth Replacement" Plans
Donors who employ various types
of charitable trusts can purchase life insurance payable to family members,
funded partly by tax savings from their charitable deductions. The life
insurance replaces the assets that are received by the charity, and if you
employ a so-called irrevocable life insurance trust, your family can receive the
insurance proceeds free of gift or estate tax.
Revocable Beneficiary Designation
You can keep lifetime
ownership rights in a policy (the right to borrow against or cash in a life
insurance policy, for example) and still name Greenpeace or another charitable
organization as the beneficiary of part or all of the proceeds. Your estate will
be entitled to a charitable deduction for the amount passing to us. If you'd
prefer, you can name Greenpeace as contingent beneficiary of a life insurance
policy. Our organization would receive the proceeds only if your primary
beneficiary died before you.
Gifts of a New Policy
It is also possible to make an important gift to Greenpeace by purchasing a new policy on your life, giving the policy to Greenpeace, and then making annual tax-deductible gifts to cover the premiums. Your gift will qualify for the 50% limitation* and five-year carryover. Most people can deduct all their premiums.
*Note that deductions for this and other gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, take unused deductions of this kind over the next five years, subject to the same 50% limitation.