The Gift of Life Insurance – An Often Forgotten Asset

Perhaps you’re giving some thought to the financial resources you may have available to make a philanthropic gift.  Perhaps you’re looking for a way to fulfill a campaign pledge, or to make a year-end gift, or to just help a cause you care about in a special way. Whatever the reason you exploring the idea, one set of assets that may not come to mind quickly — if at all — is the life insurance policies you may have collected over the years. Though you may not have thought about the idea before, a life insurance policy can be an ideal asset to fund the special gift you want to make.

In fact, whether you have several life-insurance policies or just one, once you determine that the need you once had for life insurance has passed – and, for many of us the need does fade away at some point – a philanthropic gift can be the best way to put such an asset to good use.

If you have a paid-up whole or universal life policy, you can make a gift of the policy to your alma mater or any other charitable organization — and, both the accumulated cash value and the ultimate death benefit can be earmarked by you to fund a generous gift.

And, it’s easy to do.  Your insurance representative can provide you with the forms you’ll need to name the organization you wish to designate as the charitable beneficiary and owner of the policy.  Once the paperwork is completed, you would have made a thoughtful gift using an asset that you no longer need.

Even policies for which you are still making annual premium payments can be used to make a charitable gift.  When you name a charitable organization as the beneficiary and owner of such a life insurance policy, you also can make an annual charitable gift for the amount of the premium payment – and, this would ensure that your designated charitable beneficiary has sufficient funds to keep the premiums paid year after year. Turning what otherwise would be just a premium payment into a charitable contribution is an extra advantage of such a gift of life insurance.

If you have a question about ways to devise creative charitable gift plans using existing or new life insurance policies – either for yourself and your family or for a charitable organization looking to enhance its gift planning options, I would welcome hearing from you, at tsudol@bobcarterco.com.

Life insurance may be an often forgotten asset, but it’s a great way to make a special gift.

About ted sudol

Ted Sudol brings a cross-disciplinary perspective to his work in philanthropy & fundraising. Currently Managing Director at CARTER, a professional firm dedicated to advancing philanthropy worldwide, he has nearly four decades as a fundraiser, lawyer, executive, communicator and consultant in the voluntary, public and private sectors. From local to global, his work with educational, healthcare, arts & cultural, and community organizations ranges from designing new ventures, campaign readiness plans, and complex gift strategies for high net worth families to rebuilding and repositioning projects. His specialty is bringing together diverse parties in innovative collaborations. He devises simple approaches for complex matters to achieve successful outcomes. A graduate of Georgetown and Temple Law School, he currently serves on the board for AFP Shenandoah Valley Chapter, the AFP International Education Advisory Council, and the Virginia FundRaising Institute's Planning Committee. He has been a long-time board member for Big Brothers Big Sisters of Harrisonburg & Rockingham County, Virginia.
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