Life Insurance Gifts

Life insurance is a valuable gift option that is often overlooked though it has had a long playing and important role in charitable giving. Though it is often purchased as part of an overall financial or estate plan, at some point in your life, as your circumstances change, the need for insurance may diminish. Whether you donate an older policy that you no longer need or take out a new policy to fund a charitable foundation, a gift of a policy can provide tremendous benefits to the foundation.

You may currently own a policy naming your spouse or another individual as the beneficiary. In the event this person predeceases you, you could name Earth Economics as the successor beneficiary. Or if you purchased a policy several years ago but your chosen beneficiary no longer needs the protection, you can designate Earth Economics as the beneficiary. Your estate would receive a charitable deduction and the death benefit would pass to the Earth Economics tax-free.

Donate an existing policy to Earth Economics
If you have an older insurance policy which you no longer need and would like a current income tax deduction, you can donate it to Earth Economics. As long as all of the rights of ownership are transferred to the Foundation, you will receive a current income tax deduction. Some examples of policies that may no longer be needed are: mortgage insurance, business insurance, and income replacement insurance.

Name Earth Economics as your successor beneficiary
To transfer ownership of an existing policy to Earth Economics, obtain a "change of ownership and beneficiary" form from your agent or insurance company. The appropriate form and a copy of the policy should then be transferred to Earth Economics. Earth Economics must sign the "change of ownership" form as the new owner. If the policy is not "paid up," future premiums are treated as cash gifts to Earth Economics. In the event you cease paying the annual premium, we reserve the right to cash in the policy.

The charitable income tax deduction for a partially paid-up policy is based on the "interpolated terminal reserve" (ITR) and not the policy's cash value. Use of the ITR for gift valuation purposes is an Internal Revenue Service regulatory requirement. The ITR value is an amount that reflects the daily current value of the policy and is slightly more than the cash surrender value (the amount the insured would receive) if the policy were cashed-in to the insurance company.

A donation is definitely a "win-win proposition" for you!