Have you considered a Charitable Life Policy?

Tax Season...I'm not sure that anyone has a fond love of tax season. However, for me, tax season always reminds me of being able to write one of my favorite life insurance policies of my career.

I was blessed a few years ago to work with a client with a philanthropic desire. Together, we worked to create a life insurance policy designated to a charity. By naming the charity as the owner and beneficiary of the policy, the premium that is paid annually into the policy is now a tax deduction for the client. Additionally, this client was able to exponentially magnify the total contribution to the charity by using life insurance as a vehicle to SAFELY grow the investment.

For example, let's run a case using my demographics as an example (36 year old, female, standard health). If my goal is to eventually give $25,000 to a charity of my choosing, I could elect to do this with a 20-pay whole life product. I like this policy design because I would pay the premium during my "wage earning years", but wouldn't have to carry the premium into retirement. For about $50/month in premium, I would be able to guarantee that $25,000 would go to the charity of my choice upon my passing. If you do the math, assuming that I pay into the policy for the next 20 years, I would be investing about $12,000 to guarantee $25,000 to go to the charity of my choice. And if the product performs better than guaranteed, there is a chance that more than $25,000 will go to the charity!

Now.. a $600 tax deduction isn't much in the grand scheme of things. Many clients opt to have a higher premium if they are trying to offset a tax liability. But, that generally means that the death benefit to the charity is larger. For those who are early in their careers, we often set up the policy, with the intention of keeping the client as the owner. When the tax liability of the client grows, we can transfer the ownership of the policy from the client to a charity, creating a tax deduction with a larger value.

I have also seen this done for clients who need to start their Required Minimum Distributions (RMDs). For some clients, those RMDs significantly increase their tax liability. If the RMD money is not needed for every day living expenses, a charitable life policy can be created to help offset the tax liability.

What a beautiful legacy of giving to leave behind! Sure, you may not be able to see the impact of the money that you leave behind, but your children, grandchild, friends, etc. will benefit from your philanthropy for years to come.

If "paying it forward" is part of your legacy or you want to discuss how a charitable life insurance policy can help offset your tax liability, please reach out! I would love to discuss this with you!