Charitable Gifts through Life Insurance

A gift of life insurance to charity may allow a donor to make a substantial gift cost-effectively. A policy can provide money directly to a charity, like the Wisconsin Pharmacy Foundation, creating a legacy for your charity of choice. A donor has three basic choices in making a charitable gift of life insurance:

1. The donor may give an existing policy to charity in which case all incidents of ownership should be assigned to charity and the charity named as policy beneficiary.
2. The donor may apply for a new policy on his/her life, with the charity as the original policy owner and beneficiary, subject to state insurable interest laws.
3. The donor may designate a charity as the beneficiary of an existing policy that he or she continues to own if no income tax advantages are sought.

In situations (1) and (2), the donor may continue paying the premiums or make annual gifts to the charity to enable it to pay the premiums.