There are three ways to use life insurance as a charitable gift to HLA.
- Designate Human Life Alliance to receive all or part of the death benefit on a beneficiary designation form.
- Transfer ownership of a life insurance policy to HLA. You can choose to continue paying the premiums, if any, and earn charitable tax deductions for those gifts.
- Consider additional insurance options such as a charitable gift annuity or charitable remainder trust.
Life insurance can be attractive for charitably giving—regular relatively small premiums can create a significant death benefit for HLA. When you give ownership of a policy that has some cash value, you may earn a charitable income tax deduction. When you give ownership of a policy and pay ongoing premiums, you may earn an income tax deduction for the gift of each premium payment. Some forms of life insurance require very little or no medical examination, limit premium payments for a fixed period of time, and/or allow you to invest the cash value for an even greater potential death benefit.
How to contribute while receiving income in return
Certain arrangements for charitable giving allow you or someone else to receive a regular payment of income during your/their lifetime. These types of giving arrangements can make charitable giving a lot easier and may increase your after-tax income.
While HLA is not in the position to offer such products directly, many insurance companies, financial advisors, and even credit unions, offer annuities or remainder trusts that provide regulated income options for you today. Then the remaining balance can be donated to HLA upon your passing.
Some information to consider on insurance annuities and remainder trusts:
- You can earn an attractive retirement income while allowing you to give larger charitable gifts without giving up security.
- A Charitable Gift Annuity can give you a guaranteed, fixed income on a regular basis for as long as you live. (The older you are, the larger the income payments.)
- A Charitable Remainder Trust can give you income payments based on investment performance, with a potential for increasing over time.
- Some arrangements allow you to defer income until you really need it. This means the income could be greater than if you started receiving payments right away.
- You may earn an income tax charitable deduction for the charitable portion of your gift and the income you enjoy may receive lower tax treatment than other options.
- Finally, it may be preferable to set up a stream of steady income for an heir rather than leave them a lump sum of money from your estate.
Neither Human Life Alliance nor its staff practice any licensed advisory role in law, accounting, financial planning, or similar field. Nothing contained in HLA communications should be construed as such advice. Always consult with your own professional advisors in their area of expertise.