Gifts of Life Insurance
There are two Ways to Give:
1) Give the policy to Wells of Hope As your circumstances change, the family grows up, children leave home and marry, life insurance policies that were once important safety nets may no longer be needed.
If you make Wells of Hope the owner and beneficiary of such a policy, you are entitled to a charitable donation receipt for the value of the policy—normally the cash surrender value.
If premiums are still owing and you pay them, you are eligible for a charitable donation receipt for each premium paid. You probably won’t have to pay the premiums indefinitely because most whole life policies have a premium offset option. After a period of about seven to ten years, the dividends earned by the premiums are sufficient to cover the annual premium, and you no longer have to pay to keep the policy in force.
Such a gift enables you to be a major donor for Wells of Hope at a modest current cost—a cost further reduced by the tax savings. Moreover, this substantial gift can be made without impairing other assets intended for family members.
2) Name Wells of Hope as beneficiary You can name the Wells of Hope as beneficiary of a policy but retain ownership. This is advisable if you wish to have access to the cash value and be able to substitute a beneficiary should your circumstances change. Of course, when you retain ownership you are not entitled to a donation receipt for the current value of the policy, nor for future premiums paid. Also, proceeds paid directly to the charity will not result in tax benefits at your death.
An alternative, preferable from a tax-planning standpoint, is to have the death proceeds paid to your estate and include in your will a specific bequest of those proceeds to a charity. Then a tax credit will be allowed on your final income tax return, and also for the immediately preceding year if the entire bequest is not reportable on the final return.
For more information about how you can use a life insurance policy as a donation to Wells of Hope please contact Scott Maxwell at firstname.lastname@example.org or call 1866 392 3530