As Americans, we can take pride in being a nation of givers. And as the economy improves, charitable giving is on the rise. In fact, according to the National Philanthropic Trust, total charitable giving from U.S. individuals, corporations, foundations and bequests will exceed $471 billion in 2020, with 69% coming from individuals.
While money may be tight for many Americans, it’s nice to know there’s a way to support a favourite charity without worrying about the impact on your budget. How? By giving the gift of life insurance. Here are just a few of the ways you can use this proven method to give money to your favourite causes:
Donate an existing policy – If you already have a policy and no longer need the death benefit, you can donate the policy to the charity of your choice, which may give you some tax benefits. The charity will receive the full benefit amount when you die.
Name the charity as the beneficiary – As the owner, you retain control of your policy and can leave money to as many beneficiaries as you like: children, grandchildren – even more than one charity. Or you can name a single charity as the sole beneficiary and they will receive the full amount.
Take out a separate policy – There are times when it makes sense to take out separate policies: one for loved ones and one for charitable gifts. This technique can be particularly helpful if you want to retain ownership of one policy but not the other.
Create a Charitable Remainder Trust – While this planned giving tool is designed to protect appreciated assets such as stocks and real estate, you can also include life insurance if it’s set up properly. Be sure to consult a trusts and estates advisor before taking this approach.
Gifts of life insurance can provide a lasting legacy to support causes close to your heart. Depending on the method you choose, it can also offer a range of tax benefits.
