Most people purchase life insurance policies to protect themselves and their loved ones, often at a time when their estate is small. They want to make sure their beneficiaries receive funds immediately. Long-standing insurance policies are sometimes no longer necessary where substantial other investments and benefits will yield a good income for your family after your lifetime. Life insurance could be the most sensible way for you to make a significant charitable gift and provides a number of benefits:
• The donor can get a tax deduction. By naming Southwestern as the beneficiary, the donor may receive a valuable income tax charitable deduction and reduce the size of your taxable estate. A gift of life insurance also reduces the "bite" from estate taxes - proceeds from the policy will be fully excludable from your estate.
• The donor's income won't be reduced. Unlike a gift of an income-producing asset, a gift of an insurance policy won't reduce current income.
• The donor's cash flow may increase. If the donor stops paying the policy premiums, they will enjoy an increase in spendable income. Or if they continue paying the premiums on a policy donatedto Southwestern, the donor is allowed an annual income tax deduction. Life insurance is more valuable than ever.
By a gift of insurance to Southwestern, donors can save taxes and increase your spendable income. Such gifts are easily arranged; ownership can be transferred without the expenses associated with wills, codicils or trust formation. In concert with your financial advisors, Southwestern can help the donor learn and evaluate how to get the most from a contribution in the form of life insurance.