Life Insurance as Charitable Giving? Why it Works

Life Insurance as Charitable Giving

The Giving Season: A Time for Charitable Planning 

There are so many ways to celebrate — and even more names we can use to refer to– the current “season.” Regardless of your faith and regardless of whether you even get a single day off work, the preponderance of twinkly lights and jingle bells means you can’t ignore that something is going on. 

Charitable Giving“It is not how much we give, but how much love we put into giving.” – Mother Teresa 

One nondenominational and egalitarian name for this time of year that I like is the “giving season.” Happy holidays or not, I consider this a great time each year to turn our attention outwards, and uplevel our generosity where we can. 

So, putting aside all mentions of other holiday traditions for a moment, let’s talk about charitable giving.  

Charitable Giving in Estate Planning: Why It Matters 

Here at Ingle Law, we’re in a position to uniquely help clients who want to make an impact on the next generation. Obviously, we help people provide for children and grandchildren, but many clients also ask us how best to benefit their favorite charitable organizations. Charitable giving provides an opportunity to do something good for others and help define your own legacy. 

How to Use Life Insurance for Charitable Giving Charitable Giving

One strategy you may not have considered as a way to accomplish your charitable giving goals is with your Life Insurance Policy. Naming a charitable organization as the owner and beneficiary of a life insurance policy is an appealing strategy for a few reasons: 

  1.  Immediate Tax Benefits: In many cases, you can claim a charitable deduction right away -getting a charitable tax receipt for the fair market value of your policy. 
  2. Ongoing Deductions: The premiums you continue to pay can also be used as tax deductions each year and may reduce your income tax burden. 
  3. Estate Tax Savings: When you pass away, the insurance policy’s death benefit will be deducted from your taxable estate, reducing taxes to be paid by heirs.  

Did You Know? 
In 2022, individual contributions accounted for 64% of the $499 billion donated to charities in the U.S. (Source: Giving USA) 

The amount you claim as the actual value for the policy can vary for tax purposes.  A number of factors (like the cash surrender value) determine your policy’s fair market value. This is another piece of the estate planning puzzle that we love to work through with our clients. As you can see, there are many possible puzzle pieces we can fit together to create the legacy you want to leave behind.  

Wishing you a Happy Giving Season 

Estate Planning | Charitable GivingWe thank you, this season, for all the giving you do throughout the year: all the big and small gifts you provide, and for thinking about your will as another way to give meaningfully. 

Schedule Your Estate Planning Session Today! 

When you’re ready to explore your legacy goals and create a strategy that brings clarity, security, and peace of mind for you, your loved ones and the causes you care about, we’re here to help. Schedule a Planning Goals Discovery Session today. 

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