How Life Insurance Can Help You Make a Bigger Charitable Impact
Turning Today's Generosity Into Tomorrow's Lasting Legacy
For many individuals and families, charitable giving is an important part of their financial and estate planning. Whether it is supporting a cause close to their hearts, giving back to their community, or establishing a lasting family legacy, philanthropy offers an opportunity to make a meaningful difference.
Depending on the donor’s circumstances and objectives, life insurance may provide another way to structure a future charitable gift.
One strategy that is often overlooked is the use of life insurance to leverage charitable giving. When properly structured, life insurance can help individuals turn a series of manageable financial contributions into a potentially much larger future gift to the organizations they care about.
The Power of Charitable Leverage
Most people think of charitable giving in fairly straightforward terms. If you donate $10,000 to your favorite nonprofit, the organization receives $10,000 to support its mission.
And while direct donations are incredibly valuable, particularly for organizations that rely on annual fundraising to support their operations, there may be another opportunity worth considering.
Rather than making all charitable contributions directly, an individual could allocate a portion of their charitable budget toward premiums on a permanent life insurance policy.
The policy may provide, if kept in force, a death benefit to the designated charitable organization, potentially creating a gift substantially larger than the cumulative premiums paid.
This approach is sometimes referred to as charitable leverage because the policy’s death benefit may exceed the cumulative premiums paid. The result is not guaranteed unless the policy’s applicable guarantees are satisfied, required premiums are paid, and the policy remains in force until the insured’s death.
Creative Wealth Solutions and Insurance Services, LLC
Generational Wealth for Everyday People.
Important Disclosures This article is intended for general educational purposes and should not be considered individualized financial, legal, or tax advice. The hypothetical life insurance example does not represent an actual policy illustration or guarantee. Actual policy premiums and death benefits depend on age, health, underwriting, policy design, and other factors. Life insurance policies may contain fees, expenses, limitations, and nonguaranteed elements. Maintaining coverage may require premiums beyond the illustrated contribution period. Policy guarantees are subject to the claims-paying ability of the issuing insurance company. Charitable tax deductions and estate tax treatment depend on individual circumstances, policy ownership, the recipient organization qualifications, and applicable tax laws. Consult qualified legal and tax professionals before implementing any charitable giving or estate planning strategy.
Jason Bourque is a Registered Representative offering securities through NYLIFE Securities LLC (member FINRA/SIPC), A Licensed Insurance Agency. 101 ACCORD PARK DRIVE, SUITE 201 NORWELL MA USA 02061. . Financial Adviser for Eagle Strategies LLC. Eagle Strategies LLC and NYLIFE Securities LLC are New York Life Companies. Creative Wealth Solutions is not owned or operated by NYLIFE Securities LLC or its affiliates. Neither Creative Wealth Solutions its staff nor NYLIFE Securities LLC or its representatives or affiliates provide tax, legal or accounting advice. Please consult your own professionals for tax, legal and accounting advice
Stephanie Carey and Jason Bourque are agents with New York Life Insurance Company, NY, NY