Gifts of Life Insurance
(Complete gift description)
When our children are young, we do what we must to protect them. Often times, this includes purchasing a life insurance policy to assist them if something happens to us. After they are grown, though, the policies take a back seat in our minds. Here’s an idea: use this “buried treasure” as a charitable asset. Indeed, gifts of life insurance offer you an opportunity to make a contribution to the American Red Cross, perhaps even more than you ever thought possible! Unfortunately, it is an often overlooked and underestimated gift.
- You may be surprised to learn that your surplus, paid-up life insurance policies can be used to fund a gift to the Red Cross. If, for instance, you acquired several life insurance policies when your family was younger, with the children now grown the coverage may be more than you need.
Tax Benefit: If you donate a policy, your charitable deduction will be the lesser of the fair market value of the policy – we can guide you in determining this – or your cost basis, which is the total of your net premium payments.
- Alternately, your annual income may be healthy, but you know that ongoing family obligations will make it difficult for you to accumulate capital. You want to make a significant gift to the Red Cross but wonder how you will gather the resources to do so. If you take out a new life insurance policy naming us as owner and beneficiary, you can deliver a large benefit to us from income rather than capital.
Tax Benefit: You will make deductible annual gifts to the Red Cross in the amount of the premium payments; we will, in turn, pay the premiums to the insurer.
- Or you can also transfer ownership of an existing policy which is not yet paid up.
Tax Benefit: Your charitable deduction will be determined in the same way as if you had given us a paid-up policy. We reserve the right to surrender your policy or to keep it in force; you can make deductible gifts to offset the premium payments if we elect to continue the policy.
the American Red Cross reserves the right to cash in any policy it owns at any time at its sole discretion. Of course, you may designate the Foundation as the revocable beneficiary of a life insurance policy at any time. Such a designation will not, however, provide you with any immediate tax benefits.
For more information
Email us, complete the personal illustration form, or call us at (800) 797-8022 Ext. 5 so that we can assist you through every step of the process.
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