When making an outright gift of life insurance to the Good Shepherd Fund, you have a few options available. For all options, it will be necessary to irrevocably transfer ownership of the policy to the Fund.
If it is a paid-up policy, the tax deduction cannot be greater than your net investment (total premiums paid less any dividends received). If premiums on the policy are still payable, you may stipulate that the assignment of ownership of the policy at its current value as the total charitable gift.
Another option could be more attractive. The policy can remain in force and you may pledge to make unrestricted gifts at least annually, which the Fund will use to pay the premiums. The gifts are deductible and the policy is kept in force to grow the asset.
You can also receive lifetime income for the exchange of a life insurance policy for a Charitable Gift Annuity. The Charitable Gift Annuity agreement amount is determined by the current value of the policy. Suppose the current value of the insurance policy is $150,000 and the age of the individual making the gifts is 86. Charitable Gift Annuity return rates are determined by the age of the donor; a one-life rate of return for an 86 year old is 9.9%.
This means that this donor, age 86, will receive a return of 9.9% on the current value of the life insurance policy of $150,000 or $14,850.00 annually for the rest of his or her life. In addition, there is a charitable deduction based upon the lesser of cost basis (total amount of premiums paid so far) or policy value.
If donating your Life Insurance policy is a good option for you please contact your insurance company representative and fill out the proper change of ownership forms.
