Life Insurance

  • Make United Way Foundation the beneficiary of an life insurance policy for a simple deferred gift
  • Donate an unneeded existing permanent policy
    for a charitable income tax deduction.

Life Insurance

Ben Brown is 64 and planning for retirement. When he was a young father, Ben purchased a small life insurance policy that would protect his wife and family if he were to die prematurely. Today the policy has a surrender value of about $110,000. Ben’s children are all grown and self-sufficient, and his wife has her own income, so there is little reason now to keep the policy in force. Ben could cash it in, but then he would owe income tax on the earnings he has accumulated tax-deferred inside the policy. After speaking with the folks at the United Way of Forsyth County Foundation, Ben decides to donate the policy to the Foundation. In doing, so he will be entitled to a tax deduction of the lesser of his cost basis in the policy or its replacement cost (as calculated by an appraisal). Also, he will avoid paying taxes on the accumulated earnings. Ben’s accountant endorses the idea, so Ben donates his policy to the United Way Foundation, and the foundation cashes the policy in and puts the full surrender value of $110,000 to work immediately to help address the critical needs of the community. Ben is thrilled that an asset that was sitting idly by is now actively helping his neighbors and their community.

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