How to Increase Charitable Giving With Life Insurance
- 1). Decide how much you would like to give to a favorite cause on an annual basis.
- 2). Consult with a qualified life insurance agent to determine what kind of death benefit such a gift - as a premium payment to a life insurance policy - might cost to purchase.
- 3). Contact a representative of your favorite cause who directs the endowment programs for that cause, and discuss this proposed strategy. Carefully considering all aspects - both positive and negative - of gifting money in this manner.
- 4). Fill out an application for a permanent life insurance policy on your life, naming you as the insured, and the charity or favorite cause as the owner and beneficiary of the policy.
- 5). Upon successfully completing the underwriting process, have the insurance agent set up a meeting with you and the charity's representative to go over the issued policy and, if the policy is acceptable to all parties, make a donation to the charity in the amount of the policy's premium payment.
- 6). Obtain a complete photocopy of the insurance policy for your records.
- 7). Obtain a receipt for your donation documenting your tax-deductible payment to a charitable cause for that tax year.
- 8). Continue to make donations for as long as premiums are necessary to keep the policy in force, taking a tax deduction each year for the donation (as far as is allowable under the tax code current at that time).
- 9). When you die, the charity or cause will receive an income-tax-free payment by virtue of the policy's death benefit, which is likely to be many times greater than the sum of all of your donations for premium payments.
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