Naming the Foundation as the beneficiary and owner of an insurance policy generally affords Ohio donors a current-year income tax deduction for its cash value. If premium payments are continuing, local donors may be entitled to an income tax charitable deduction each time a gift is made to the Foundation that is used thereafter by the Foundation at its election to pay the insurance premium.
Because life insurance premiums are based on mortality rates, gifts of life insurance are extremely affordable for younger donors, thereby enabling them the opportunity to make sizable deferred gifts with modest out-of-pocket expenses.
There are several ways to give insurance as a charitable gift and also receive tax benefits:
- The Foundation can be designated as a beneficiary and owner of a new policy. When the Foundation is the sole owner, all premium payments are deductible.
- An existing policy can be transferred and the Foundation can be named as the owner and beneficiary. At the time of transfer, a current deduction roughly equal to the cash value of the policy can be taken. All future premium payments, when paid, would be a current tax deduction.
Life insurance proceeds can be earmarked in numerous ways:
- To fund an unrestricted gift to the Foundation, assuring the growth and continuity of our Jewish community.
- To create a philanthropic fund upon a donor’s death, allowing a donor’s spouse and/or children to continue their charitable interest.
- To create a “field of interest” endowment to support a particular community need.
- To ensure the continuity and perpetual support of specific agencies beyond the lifetimes of our valued donors.