Gifts of Life Insurance

The need for life insurance changes as the circumstances of your life change. For young families, life insurance is usually purchased to provide security for loved ones or a personal business in the event of your death. Security for your children’s education or payment of your home’s mortgage are two other important reasons for buying life insurance.

But as your family matures and your finances stabilize, the need for some policies change or even disappear. An existing policy that is not needed can be given to Long Beach Rescue Mission Foundation, providing current tax benefits for your charitable gift.

Bob and Mary Johnston bought a life insurance policy on Bob when they were young parents with two small children. Now their children are grown and on their own. Bob and Mary would like to give this paid-up policy of $100,000 to benefit the work of Long Beach Rescue Mission Foundation, naming LBRM-Fdn as the owner and primary beneficiary.

They will receive a current income tax deduction equal to the replacement cost of the insurance (usually a major portion of the cash value). Bob and Mary are pleased they could support LBRM-Fdn with a gift of this stature.

Almost anyone can make a sizable gift to Long Beach Rescue Mission Foundation by purchasing a new life insurance policy. Life insurance provides an excellent opportunity to reach your desired level of commitment at a comparatively low annual cost.

A current gift can be made to LBRM-Fdn which will purchase a policy with a face amount equal to your desired commitment level. Long Beach Rescue Mission Foundation would be the owner and beneficiary of the policy. You will receive an income tax deduction for the amount of your initial gift and any subsequent gifts to pay annual premiums. It is also possible to make an insurance gift with a single premium policy.

Margaret Wilson, age 40, has been a longtime friend an supporter of LBRM-Fdn. Beyond her current level of giving, Margaret would like to make a significant gift.

By making a gift of life insurance to LBRM-Fdn, Margaret can make a future gift of $100,000. For around $1,100 per year for eight years, she will significantly impact the services provided by Long Beach Rescue Mission Foundation, while also receiving a tax deduction for each year’s gift.

You can also designate Long Beach Rescue Mission Foundation as a primary beneficiary or contingent beneficiary while maintaining ownership of the policy. By doing so, you ensure the proceeds of your policy are used as you want and can change the beneficiary designation at any time. This arrangement does not entitle you to current income tax deductions.

There are five ways to name Long Beach Rescue Mission Foundation as beneficiary:

• Sole-Beneficiary – Long Beach Rescue Mission Foundation receives all policy benefits.
• Co-Beneficiary – Policy proceeds are shared between LBRM-Fdn and any other beneficiaries you name.
• Second Beneficiary – Long Beach Rescue Mission Foundation receives policy benefits if the first beneficiary predeceases you.
• Last Beneficiary – Long Beach Rescue Mission Foundation receives the policy’s proceeds if both the first and second beneficiary have died.
• Remainder Beneficiary – Payments remaining from a policy which pays an annuity to an heir when that heir does not live to receive the entire income can be left to LBRM-Fdn.

If you plan to make a gift to Long Beach Rescue Mission Foundation in the form of a will, bequest or charitable remainder trust, you can give a life insurance policy to your children or an irrevocable trust for the same amount and replace the charitable gift to your family. The asset will also be removed from your taxable estate.

If you are uninsurable, you can purchase a policy on another person, such as a spouse, child or grandchild. Simply name Long Beach Rescue Mission Foundation as the owner and beneficiary of the policy (LBRM-Fdn should apply for the insurance in their life). Because the recipient of your charitable gift is the owner and beneficiary, you are entitled to tax deductions on the premiums you pay.

• Freedom – Naming LBRM-Fdn as beneficiary of a life insurance policy allows you to give more than you might have believed possible.
• Versatility – A gift of life insurance has many options which allow you to meet your current responsibilities while also achieving your charitable goals. In addition, making changes in policy beneficiaries is often much less complicated than changing a will, establishing a trust, or altering other forms of planned gifts.
• Tax Benefits – Current income tax deductions are available to you if you itemize when the ownership of a life insurance policy is transferred or given to LBRM-Fdn . If you retain ownership of the life insurance policy, you are not entitled to an income tax deduction.