Life Insurance
Life Insurance Policy
An important but frequently overlooked role of life insurance is the one it can play in charitable gift planning. Life insurance itself can be the direct funding medium for a gift, permitting the donor to make a substantial gift (face value of policy) for a relatively modest annual outlay (i.e., the premium payment).
Life Insurance to Replace Gift
Life insurance can also be used to replace an asset that has been given to Southwestern University. How it works: After a donor makes a gift to Southwestern University, the tax savings produced by the charitable deduction are used by his or her children or an irrevocable trust to purchase and pay the premiums on a life insurance policy on the donor's life. Such an arrangement can ensure that the interests of family beneficiaries will not be adversely affected.
Next Steps
- I’d like to have a confidential conversation with a gift planning
officer about this gift plan or other options - I’d like a personal calculation of this gift
Please note: Because the federal estate tax has been repealed for 2010, there is no current estate tax in 2010 for the gifts described on this page. However, the consensus opinion among professionals is that Congress will enact an estate-tax law that may be retroactive to January 1, 2010. It is very important that you seek the advice of your estate-planning attorney to determine what changes, if any, need to be made to your existing estate plans, and then again if Congress reinstates the estate tax sometime later this year.
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