Should I add my Church as a Beneficiary on a Life Policy?
Church or Charity as a Beneficiary on a Life Policy
Many individuals would love to give a substantial gift to their favorite charity/non-profit, which here in South Carolina is likely their church. A Whole Life Insurance policy with the Beneficiary listed as your favorite charitable organization is one solution. It is effective for your charity, it is convenient and easy for you, and it is also tax deductible*!
The Benefits You Receive:
- Donors who give a policy to a charity are eligible for a charitable deduction for the policy itself and for any premiums they pay to maintain the policy after the charity takes ownership.*
- A reduction in the size of your taxable estate.*
- A feeling of satisfaction as your tax-deductible gift of premiums or policy are magnified by life insurance as the insurance gains in value over time.
- Single or limited premium payments make it easy and convenient for you to purchase and maintain.
- A guaranteed gift that is much larger than its costs you.
The Benefits Your Charity Receives:
- Tax-Free and guaranteed life insurance benefits in the event of your death
- A guaranteed gift that is much larger than its costs to the donor.
- With Single and Ten Pay Whole Life policies, the premiums are much smaller than the death benefit itself.
Is this the most effective and convenient asset one can give to a charity?
Yes, it likely is!
Here is a financial article backing up this assertion.
What if you already have a policy and would like to donate it?
There are two options:
- Keep it and let your heirs donate it.
- Donate it now and get the tax savings and satisfaction.
The Wall Street Journal sums up this advice here.
What Type of Life Insurance Product is eligible?
Any life product is eligible, but it is most efficient to purchase a Single Pay Whole Life policy or a Ten Pay Whole Life policy. With the Single Pay Life Policy, your entire premium is paid up front and the gift is completed. The benefit of the ten pay policy is that you will pay it off in full after only 10 years allowing you to spread the cost over 10 years if needed.
Livingston Insurance can handle this process for you in a quick and easy manner. We have many types of insurance policies available for you and would be glad to give you options!
*Note: This discussion concerns federal tax law. State and Local income tax law will vary. Any reference to tax treatment does not constitute tax, legal, financial, or accounting advice. Consult your tax advisor.