Tuesday, April 26, 2005

Easy Gifts-Life Insurance

Giving life insurance is often an easy way to make a substanital gift to your favorite nonprofit.

Take for example Grace and Bud. They purchased a life insurance policy for Bud shortly after the birth of their only child over 40 years ago. They then purchase a policy for Grace when she returned to work when their son was in junior high school. Their primary purpose for having life insurance was to provide income replacement for the surviving spouse and ensure that he or she could afford to send their son to college.

Grace and Bud are now retired and their son finished his graduate studies over 15 years ago. When they decided to make a substantial gift to their favorite Christian charity they initially overlooked their paid-up life insurance policies. The couple soon realized that they no longer needed their insurance for its intended purpose and giving it as a gift to charity would provide some tax benefits for them as well.

If this is your situation please consider donating the policy. You usually may claim a charitable deduction for approximately the policy's cash surrender value, and the proceeds are completely removed from your estate.


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