Gifts of Life Insurance

Life insurance is an asset a client may not think of donating to the Eau Claire Community Foundation until you explain how powerful, practical, and simple it can be.

How You Benefit

When ownership of a life insurance policy is assigned to the Foundation and ECCF is named its beneficiary, the following good things happen:

  • The client receives an income tax charitable deduction, available under most circumstances for the cash value and any donated premium payments.
  • The client realizes tax savings from use of the deduction, which you can help them invest for future income.
  • The client’s future estate tax liability is reduced

How it Works

When a client owns a life insurance policy with accumulated cash value, he or she is essentially sitting on a pile of money. When the original purpose for the protection no longer applies – such as to educate children now grown or to provide financial security for a spouse now deceased—life insurance can be redirected to help support a worthwhile cause.

One option is simply to name the Eau Claire Community Foundation as the primary beneficiary. (Naming ECCF as a beneficiary while the client retains ownership of the policy does not qualify the client for an income tax deduction.) Or, ECCF can be named as the beneficiary and the client can assign ECCF ownership of the policy as a current charitable gift. Doing so provides tax benefits as outlined below.



Donating a New Policy

Perhaps your client doesn’t own an existing policy but still realizes how beneficial giving life insurance can be. If so, in most states, a client can purchase a single payment insurance policy and name a qualified charity like the Foundation as the beneficiary and owner of the policy rather than paying premiums. Even greater leverage is possible when two donors, usually spouses, purchase a two-life second-to-die policy. With two lifetimes before the payment of death benefits, a future gift to ECCF will cost the client even less.

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