Boosting the Potential of Charitable Gifts

Do you regularly make substantial gifts to a favorite charity? Did you know that you can increase your generosity with a life insurance gift? Life insurance has long been recognized as an effective estate planning tool. The key concept is that you pay fewer dollars today (in the form of premiums) and your heirs receive a potentially large death benefit upon your death. This same planning mechanism can be applied to charitable gifts as well. For example, suppose an older couple, the Smiths, make an annual gift of $5,000 to a favorite charity. Rather than gifting $5,000 in cash to the charity each year, the Smiths leverage their gift and pay the premium on a survivorship life insurance policy.

This insurance gifting program is arranged so the charity is the owner and beneficiary of the new survivorship policy (subject to state insurable interest laws). The Smiths receive an annual charitable deduction for their generous gift, and the charity will ultimately receive a potentially substantial life insurance death benefit.