Insurance – March 2015

Leave A Legacy

There are a lot of good reasons to consider using a life insurance policy for the purpose of giving to your favorite charity. Among these is the fact that it ultimately provides to the charity a much larger gift than would be possible with the other assets: like cash, stocks, bonds or even real estate. In additi0n to the multiplication of the bequest to the charity the method for completing the transaction is relatively simple, confidential, and extremely effective. I’ve compiled a list of some of the questions others have had, and you might have, regarding this most effective giving method.

Q: WHY SHOULD I CONSIDER A CHARITABLE GIFT OF LIFE INSURANCE?
A: Basically, the gift of life insurance to a charitable organization permits a person the opportunity to give a maximum bequest (life insurance death benefit) for a relatively small amount of charitable contribution (the policy’s premiums). This can accomplish the charitable goals of the donor in an efficient, timely manner, upon the death of the insured person – out- side the probate process, and therefore not a matter of public record.

Q: ARE THERE ANY OTHER ADVANTAGES?
A: Yes, generally, as long as the new life insurance policy is owned by the charity, the premiums for the policy are deductible from federal income taxes as charitable gifts (subject to limits of income). Since the charity is designated as the beneficiary, you’ll have the benefit of knowing that upon the insured’s death, the life insurance death benefit will be paid directly to the charity you have chosen.

Q: IS A GIFT OF LIFE INSURANCE TO A CHARITY SOMETHING THAT EVERYONE SHOULD CONSIDER?
A: No. Only people whose individual life insurance needs have already been met (for things such as income replacement, mortgage protection, education funding, cash needs, final expenses, estate and retirement planning and business succession, for example), should consider gifting a life insurance policy to a charity. The first thing to consider must always be the protection of your family’s interests.

Q: HOW DO I DETERMINE IF GIVING A LIFE INSURANCE POLICY TO CHARITY IS RIGHT FOR ME?
A: Again, only after serious and thoughtful consideration of your family’s needs should this be contemplated. In consultation with your family, a trusted financial advisor and your accountant and/or lawyer you may determine if this is a suitable option for you. As your Knights of Columbus insurance agent I have the knowledge and analytical tools to help you determine if your other needs are covered. This consultation is free. I can also provide the products you may need to accomplish your goals.

Q: WHAT ARE THE BENEFITS TO THE DONOR?
A: For the donor, the benefits include: • Convenience – It is a simple process to designate a beneficiary or transfer the ownership rights under a new or existing policy .• Tax Savings – Significant income, estate, and gift tax savings may be available by effectively planning your gift using life insurance. • Privacy – Unlike a bequest in your will, a life insurance certificate gift is not a matter of public record.
• Flexibility – You can choose whether to name a charitable interest as a beneficiary on either a new or existing policy.

Q: WHAT ARE THE BENEFITS TO THE CHARITY?
A: The benefits to the recipient include: • Size of the Gift – With a gift of life insurance, your favorite charitable interest may receive a larger contribution than would be possible if you gave other assets .• Avoiding Probate – Your life insurance gift can be put to work faster because the charitable recipient receives the certificate proceeds immediately, without having to wait for the estate to be settled .• The Full Amount – Since life insurance gifts are generally not subject to estate taxes or probate costs, your charitable beneficiary receives all the proceeds you designate.

Q: CAN YOU SUMMARIZE?
A: The charitable gift of life insurance is an effective way of planning a gift to the charity of your choice. The premiums may be tax- deductible while the donor lives, and the death benefit that passes to the charity is the life insurance death benefit. This benefit is usually a much greater amount than most people could consider gifting using other assets. You may also consider giving an existing policy to a charity. This is a simple process of changing the beneficiary and assigning ownership of the policy to the charity.

Q: HOW DO I GET STARTED
A: The first step is to determine that your needs for personal and business life insurance are met. As your Knights of Columbus field agent I will conduct a free analysis of these needs, and your ability to meet them with existing insurance and assets. If you determine that charitable gifting of life insurance is right for you, I can also help by providing access to the highest quality products from our top-rated life insurance organization. In short, I’ll be with you and your family through the whole process.
While different giving methods suit different personal circumstances, you may find that giving life insurance can complement your plans to provide for your family’s future financial security. Such gifts can provide you with an efficient, affordable way to achieve your philanthropic goals. I am just a phone call or e-mail away from helping you get started.

Insurance Agent Robert SchmutzerThe Knights of Columbus is Your Shield of Protection for Life.

Fraternally Yours In Christ,

Robert L. Schmutzer, PFN
Field Agent
(805)258-6013
Knights of Columbus
Robert.schmutzer@kofc.org