As Americans, we can take pride in the fact that we are a nation of givers. And as the economy improves, charitable giving is on the rise. In fact, according to the National Philanthropic Trust, in 2016, total charitable giving from U.S. individuals, corporations, foundations and bequests exceeded $390 billion, with 72% coming from individuals.
While money might be tight for many Americans, it’s nice to know that there is a way to support a favorite charity without having to worry about the impact it could have on your budget. How? By giving the gift of life insurance.
Here are just a few ways you can use this method to contribute money to your favorite causes:
Donate an existing policy. If you already have a policy and no longer need the death benefit, you can gift the policy to your desired charity, which might give you some tax benefits. The charity will receive the full benefit amount when you die.
List the charity as a beneficiary. As the owner, you remain in control of your policy and can leave money to as many beneficiaries as you like: Children, grandchildren, even multiple charities. Or, you can name a single charity the sole beneficiary, and it will receive the entire amount.
Purchase a separate policy. There are times when it makes sense to have separate policies: One for loved ones and one for charitable gifts. This technique can prove especially helpful if you would like to retain ownership of one policy, but not the other.
Create a Charitable Remainder Trust. While this planned-giving tool is designed to shelter appreciated assets, such as stocks and real estate, you also can incorporate life insurance if it’s set up properly. Be sure to consult a trusts and estates advisor before pursuing this approach.
Giving life insurance can be a lasting legacy to support causes dear to you. Depending on the method you choose, it also might offer a variety of tax benefits.
Claire Damgaard is an agent with New York Life Insurance Company in Dubuque.