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Life Insurance
This gift is for you if...
- You are maintaining insurance coverage that your family no longer needs.
- You hold few appreciated securities in your portfolio, or few that you wish to donate.
- You are a younger donor who wants to create an endowment for us from income instead of capital.
You may be surprised to learn that your surplus, paid-up life insurance policies can be used to fund a gift to Children's. If, for instance, you acquired several life insurance policies when your family was younger, with the children now grown the coverage may be more than you need.
If you donate a policy, your charitable deduction will be the lesser of the fair market value of the policy – we can guide you in determining this – or your cost basis, which is the total of your net premium payments.
Difficulty Accumulating Capital?
Alternately, your annual income may be healthy, but you know that ongoing family obligations will make it difficult for you to accumulate capital. You want to make a significant gift to Children's, but wonder how you will gather the resources to do so.
If you take out a new life insurance policy as a gift, you can deliver a large benefit to us from income rather than capital. You will make deductible annual gifts to us in the amount of the premium payments; we will, in turn, pay the premiums to the insurer.
Transfer of Ownership
You can also transfer ownership of an existing policy which is not yet paid up. Your charitable deduction will be determined in the same way as if you had given us a paid-up policy. We reserve the right to surrender your policy or to keep it in force; you can make deductible gifts to offset our premium payments if we elect to continue the policy.
Please note: it is important that you name Children's as the irrevocable owner of the policy and not just the beneficiary if you are interested in getting a tax deduction. The IRS does not allow deductions for your premium payments if you retain ownership of the policy.
If you have borrowed against a life insurance policy, a subsequent gift of the policy will create taxable income for you – the difference between the loan balance and the fair market value of the policy.
For More Information
Complete the personal illustration form or contact us so that we can assist you through every step of the process.
This is not professional tax or legal advice. Donors must consult their tax and legal advisors regarding their specific situation.