GUEST COLUMN: Investigating options

Quite often people say they would like to donate more to their favourite charity but feel financially unable to do so

Quite often people say they would like to donate more to their favourite charity but feel financially unable to do so.

The use of insurance for charitable giving is just one of the many effective and easy strategies that can help you support the charitable organizations meaningful to you.

Life insurance may help increase the size of your gift to the charity you’ve chosen, and provide you with tax benefits.

There are three ways you can gift a life insurance policy to a charity:

You can purchase the insurance yourself and name the charity as beneficiary.

You can own the policy yourself and name your estate as beneficiary.

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. You may even gift an existing policy.

Each of these options provides the charity of your choice with the policy proceeds.

How might this benefit you?

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, check with your tax advisor to see how this may impact the amount of tax you pay.

Make sure you have a detailed discussion with your financial advisor about the different options that are available to you to make an informed decision.

Together you can implement insurance solutions as part of your overall financial strategy.

Bruce Shepherd is a financial advisor with Edward Jones. This article is provided for information purposes only. Please consult with a professional advisor before implementing a strategy.



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