What is the opportunity?
Many people would like to donate more to their favourite charity but feel financially unable to do so. Life insurance can help. Life insurance increases the size of your gift to the charity you’ve chosen and it provides you, the donor, with significant tax benefits.
How does it work?
You have a number of choices when you give a gift of a life insurance policy to a charity. You can purchase the insurance yourself and name the charity as beneficiary. Or, you can own the policy yourself and name your estate as beneficiary and provide direction in your Will to gift the funds. You may also choose to make the charity the owner of the insurance policy outright with you paying the premiums on the charity’s behalf. Each of these options provides the charity with the policy’s proceeds when you die.
What are the benefits to you?
Not only will you achieve peace of mind knowing your gift will make a difference, but you will also receive tax benefits. If you purchase the insurance policy and name the charity as beneficiary or have your estate gift the insurance proceeds to the charity, the charity will issue a charitable receipt when it receives the funds. If the charity owns the policy and you make the premium payments on the charity’s behalf, the charity will issue a charitable receipt each year for the amount you pay. In both situations, you can use the receipt on your tax return to reduce the amount of tax you pay.
For further information, please contact us.