Life Insurance
Gifts of life insurance, like most charitable gifts, qualify for income tax benefits. The donor can choose either to enjoy the benefits during their lifetime or defer them to the estate. A life insurance policy can be used as a charitable gift to fund a named fund at the CASI Foundation or contribute to an existing fund.
Donors may enter into a contract with the CASI Foundation whereby a life insurance bequest can be transferred to the Foundation to carry out the charitable intentions of the donors.
The Advantages of a Life Insurance Bequest
Universality
Regardless of age, there is a form of life insurance giving that suits everyone.
Flexible Tax Benefits
Gifts of life insurance, like most charitable gifts, qualify for income tax benefits. The
donor can choose either to enjoy the benefits during his/her lifetime or defer them to the estate.
Speed
Compared to the settlement of an estate, life insurance proceeds are paid to the beneficiary much faster.
No Fees
Unlike a will, a gift of life insurance can be arranged without the help (or expense)
of a lawyer. And insurance proceeds are paid to the church outside the estate,
so there are no probate fees assessed on the gift.
Options
1. Donate the Policy
If the donor is the owner of an
individual (not group) life insurance policy, it can be donated by transferring ownership of
the policy to the nonprofit. The policy can be one that has been held for some time,
or a new one that is bought specifically for this purpose.
Tax Treatment Because this donation is irrevocable (i.e. one cannot change his/her mind), the nonprofit can give a donation receipt for the cash value of the policy at the time of the transfer. Plus, every premium paid after this date is treated as another donation, and the nonprofit will give an annual receipt for all premiums paid during the year. This will reduce the amount of income tax paid during the donor’s lifetime.
Method Call your agent and ask to complete an ownership transfer or “absolute assignment”. The insurance company will provide a form for the donor to sign.
2. Name the Beneficiary
By naming the nonprofit as beneficiary, the donor is giving the policy proceeds or death benefits.
The donor continues to own the policy and can exercise all the rights that go along with that,
including the right to name a different beneficiary if the donor later changes his/her mind.
Life Income Gifts - Charitable Gift Annuity
Donors may enter into a contract with the CASI Foundation whereby they transfer assets, cash or securities
to the Foundation and
the Foundation pays them a fixed and guaranteed payment (monthly, quarterly, semi-annually or annually)
for the remainder of their lives. The amount of the lifetime payment is based on annuity rates published
by the National Committee on Gift Annuities. Upon death, the remaining principal is retained by the
Foundation to carry out the charitable intentions of the donors.