How would you like to give $100,000 to the charities that are most important to you?
YOU CAN WITH LIFE INSURANCE!
Gifts of life insurance can provide an opportunity to make a contribution to the Jewish community without affecting your present financial status. Many don’t realize how affordable this can be. For example, a $100,000.00 term life insurance policy for a 65-year-old female non-smoker can be as little as $600 a year.* In addition, the $600 annual premium payment can be tax deductible. Think about what a gift like that would mean for your synagogue or favorite agency. You can donate all or part of an existing policy. You can also purchase new life insurance for your favorite charity.
There are two simple ways to set up a gift of life insurance:
1. You can name your synagogue, the Jewish Federation, Jewish Foundation, and/or a local Jewish agency as the beneficiary of your life insurance policy, but retain ownership of the policy itself (make sure you use proper legal name and tax identification number for the beneficiary organization).
2. You can name your synagogue, the Jewish Federation, Jewish Foundation, and/or a local Jewish agency as the owner and beneficiary of your life insurance policy.
INSURANCE GIFTS TO CONSIDER
Existing policy: Later in life, you may have a life insurance policy that is no longer needed for its originally intended purpose; maybe your kids are grown and/or your financial situation has changed. If you are in such a position, your policy may be a great asset with which to make a charitable donation.
For example, all or part of your paid-up life insurance policies can be used to fund a gift to the Jewish community and you can designate an amount to establish a designated endowment in your family name—this family fund may be designated for your synagogue, a local agency, programs in Israel, camp scholarships, or for any charitable program or organization that is important to you.
Tax Benefit of Donating an Existing Policy: If you donate the existing policy to charity, your charitable deduction will be either the fair market value of the policy or your cost basis (the total of your net premium payments), whichever is less. Note, you can also choose to retain ownership of the policy but still name the charity as a beneficiary of the policy. Sometimes donors choose to do this because the policy is owned by a trust and/or has multiple noncharity beneficiaries as well. If you name a charity as a beneficiary but do not transfer the ownership, the charity will still receive monies from the insurance when you pass, however, you will not be able to claim a charitable income tax deduction during your lifetime, but the amounts passing to charity will be deductible from your estate.
Tax Benefit of Donating a Policy While Still Making Payments: 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 donated a paid-up policy, and your ongoing premium payments will be tax deductible, provided the charity owns the policy and is the beneficiary of the policy, and you make your premium payments to the charity.
If you name a charity as a beneficiary but do not transfer the ownership, the charity will still receive monies from the insurance when you pass, however, you will not be able to claim a charitable income tax deduction during your lifetime for the value of the transferred policy or for the amount of the premium payments (but the amounts passing to charity will be deductible from your estate).
New Policy: You can purchase a new policy for the benefit of a charitable beneficiary.
*Rates are for illustrative purposes only and based on recently quoted term rate for a non-smoker preferred rate for a female. Actual premiums may differ. For more information contact the Jewish Foundation, Lisa Stanger, Executive Director, firstname.lastname@example.org, (203) 387-2424, ext. 382. Note, the Jewish Foundation does NOT sell life insurance but can assist you in your charitable giving to your synagogue and other Jewish organizations.