Life Insurance is a simple idea that takes many shapes. Its basic purpose, of course, is to provide cash to meet the needs of survivors at the insured person’s death, and all policies provide this benefit. However, life insurance policies may also build up cash value that can be utilized for a variety of purposes. A particular policy may be intended primarily for protection through its death benefit, or it may be designed more for investment purposes through increasing cash value. Here are some general types of policies:
As time goes by, our priorities change. We find ourselves wanting to share our good fortune with those around us, to show our support of the causes and institutions we believe in, to leave the world a little better than we found it. When goals such as these take shape, the life insurance policy that served us well in years gone by can serve us in an entirely new way when we make a charitable gift. In other cases, a new policy can be the key to achieving philanthropic goals. Here are some possibilities:
Give the death proceeds. Christine no longer needs the $25,000 death benefit from the policy she took out years ago when her family was young. So she decides to have Big Brothers Big Sisters of the Edmonton Area receive the proceeds payable at her death. She retains ownership to allow her the option to change the beneficiary if her circumstances change.
Give the policy itself. Jacqueline, age 75, had almost forgotten her paid up $50,000 policy until she began thinking about establishing a gift to Big Brothers Big Sisters of the Edmonton Area in memory of her mother. She depends on the income from her other investments, but the insurance policy makes an ideal gift. Because she makes Big Brothers Big Sisters of the Edmonton Area the beneficiary and also the owner of the policy, her gift is irrevocable, and she receives a charitable donation receipt for the value of the policy (normally the cash surrender value.) Jacqueline’s policy is paid up, but if premiums were still owing and she continued to pay them, those payments would be eligible for a donation receipt as well.
Give a new policy. Charles, in his mid-40’s, would like to make a significant gift to Big Brothers Big Sisters of the Edmonton Area. He has no existing policy or assets to contribute but he does have some discretionary income, so he purchases a new $40,000 policy naming Big Brothers Big Sisters of the Edmonton Area as both owner and beneficiary, and pays for it in five annual payments of $1,200 each. He receives a donation receipt for each payment.
These are but some of the ways in which life insurance can help you achieve your personal and philanthropic goals. If you would like to explore a life insurance gift to Big Brothers Big Sisters of the Edmonton Area tailored to your circumstances and interests, please contact us.