Life Insurance and Gifting

You may be the type of person who wants their gifts to be used right away, but others like to leave an endowment fund that will distribute grants to charities annually from its earnings. Some people like both strategies. Those who make endowments are invested in the success of the charity, so these people usually increase their operating budget gifting.

One way to set up an endowment is to gift life insurance to an account that supports a specific charity. If you gift a new life policy, you might want to give cash to the charity and have them buy the policy. If you give a cash gift, then there is no need to do an appraisal of the gift.

If you have life policies you no longer need, they could consider giving the policy to a charity. You can get a deduction if you do or you may be able to do a tax-free exchange into a new policy that is more conducive to gifting.

See Steve Savant, Gifting Life Insurance, Producersweb.com, Dec. 22, 2011.

Special thanks to Jim Hillhouse (Professional Legal Marketing  (PLM, Inc.)) for bringing this article to my attention.