Gifts of Life Insurance: Getting Started
Life insurance is an asset you may not think of donating to the University of Minnesota Foundation until you hear how powerful, practical and simple it can be.
How It Works
When you own a life insurance policy with accumulated cash value, you're 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—your life insurance can be redirected to help support a worthwhile cause. One option is simply to name the University of Minnesota Foundation as the primary beneficiary. (Naming us as beneficiary while you retain ownership of the policy, however, does not qualify you for an income tax deduction.) Or, you can name us as the beneficiary and also assign us ownership of the policy as a current charitable gift. Doing so provides you tax benefits as outlined below.
Gift of Life Insurance
You give a life insurance policy.
You receive an income tax deduction.
The policy is kept or cashed in by the University of Minnesota Foundation.
University of Minnesota Foundation
How You Benefit
When you assign us ownership of a life insurance policy and also name us as the beneficiary, the following good things happen:
- You receive an income tax charitable deduction, available under most circumstances.
- You realize tax savings from use of the deduction, and these savings can be invested for future income.
- You reduce your future estate tax liability.
If you are concerned that supporting our work will reduce your family's inheritance, a new life insurance policy equal to your charitable gift can replace the value of your loved ones' inheritance.
Donating a New Policy
Perhaps you don't own an existing policy but still realize how beneficial giving life insurance can be. If so, you can—in most states—purchase a new insurance policy and name a qualified charity like ours as the beneficiary and owner of the policy. Rather than paying premiums to the insurance company, you make tax-deductible cash gifts to cover the annual 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 us will cost you even less.
Please contact Planned Giving at 612-624-3333 or 800-775-2187 or firstname.lastname@example.org if we can answer any questions you have about this way to support our work.
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.