Charitable giving through life insurance offers a strategic way to enhance your legacy while benefiting from various tax advantages. This approach allows you to make significant contributions to your favorite causes, maximizing the impact of your generosity.

Giving Away Assets at Death

While estate tax deductions are available, assets owned at the time of death and contributed by a donor’s estate typically do not qualify for an income tax deduction. This is where charity-owned life insurance provides a unique advantage.

Benefits of Charity-Owned Life Insurance

Contributing towards life insurance premiums during your lifetime allows you to benefit from income and gift tax deductions. Upon death, the insurance benefit is typically paid estate tax-free, ensuring a more substantial impact for the charity.

Summary at Mrs. Donor’s Life Expectancy

In a scenario using charity-owned life insurance, consider these numbers:

• Total cash contributions for premiums: $4,700,000
• Potential income tax savings:               ($1,739,000)
• Total net after-tax outlay:                      $2,961,000
• Net benefit to charity at death:           $10,000,000

This showcases a remarkable total return factor of 3.4 times the initial outlay.

Understanding the Impact

To achieve the same legacy through asset accumulation, Mrs. Donor would need to earn an annual rate of return of 14.10% before taxes and fees. The advantage of life insurance includes predictability and a safeguard against stock market volatility, offering a stable and reliable benefit.

Consider partnering charity-owned life insurance with your philanthropic goals not just for the tax benefits, but to truly multiply your giving potential. For those passionate about their charitable missions, this strategy is a meaningful way to leave a lasting legacy.

We invite you to explore this avenue of charitable giving. Contact us today to find out how you can maximize your contributions with charitable life insurance.