Life
Insurance For Charities
Author: Ivon T. Hughes
There are
three ways in which a charity can benefit through the gift of life insurance.
Under the "gift plan," your client makes the charity the owner
and beneficiary of an existing life insurance policy on his/her life with
or without; its that simple. If your client no longer requires a policy
that is rich in cash value, he or she can change the ownership and beneficiary
designation to the charity.
Most countries
allow full deduction of the premiums but you should consult an advisor/accountant
for how the rules affect you.
The second
method of gifting life insurance is called a "charity ownership".
Assume that a married couple gives $5000 to a specific charity each year,
so over the next 10 years, they will have contributed $50,000 after tax.
In this case the
charity purchases the maximum possible life insurance policy on your client's
life with the annual premium.
Another charitable
giving technique is called the "charitable bequest" which makes
the charity the beneficiary of the life insurance policy. Because you remain
the owner of the policy for the rest of your life, there may be no income
tax deduction as there is in the case of the two previous plans.
All three
plans may clearly offer something for everyone. As in the case with every
financial strategy, you should be well informed about the different options
that are available so you can select strategy that will work best.
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Ivon T. Hughes, The Hughes Trustco Group Ltd.
Online Insurance Broker - Get a FREE Quote TODAY!
Tel: (514) 842-9001 Email: [email protected]
Web: http://www.trustco.ca
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