A Gift of Life Insurance

With a gift of life insurance, you have several options for making a substantial, cost-effective gift.

OPTION 1—a charitable beneficiary designation

You may find that naming Intermountain Foundation as the beneficiary of your life insurance policy is a powerful way to make a future gift that costs nothing today and gives you the flexibility to make changes if your needs or goals change. You can name us as the:

  • Primary beneficiary
  • Percentage beneficiary, along with one or more heirs or other charitable beneficiaries
  • Contingent beneficiary, to receive the proceeds only if the primary beneficiary cannot

OPTION 2—make a tax-efficient gift of a policy

You may own a life insurance policy you no longer need for its original purpose. Perhaps you bought it to pay off the mortgage or cover college tuition expenses, but now your home is paid off and your children are grown. In this case, you may wish to make an immediate gift of your policy.

A paid-up policy is an easy gift to make. In many cases, the after-tax cost of this generous gift is only a fraction of the benefit we receive, and the gift qualifies for a charitable deduction (if you itemize) equal to the policy’s replacement value or your basis in the policy, whichever is less.

Intermountain Foundation does not accept polices that are not yet paid up.

OPTION 3—give a policy, receive an income

You may find that transferring a paid-up policy into a charitable remainder trust (CRT) provides many tax and financial benefits. The trust will pay an income to your beneficiaries for life. When the trust beneficiary dies, the remaining trust assets pass directly to Intermountain Foundation. You receive an immediate income tax deduction when you establish the trust for the present value of our remainder interest. Read more about CRTs.

Evaluate the fit.

A gift of life insurance may be a particularly good option to consider if you:

  • Want to make a substantial gift with a modest after-tax cost and no out-of-pocket expense
  • Want the ability to change your gift if your circumstances or goals change
  • Bought a life insurance policy to cover expenses that are no longer an issue
  • Would like both a tax deduction and a future income stream
Old Man Enjoys Sitting On A Bench In His Garden

See how it works.

Don bought a life insurance policy when his children were young to protect his family while the children were growing up and ensure that his wife could pay off the mortgage on their house. After many years, he realized the children were grown and successful, and the mortgage was paid off. Don decided to use the policy to meet his charitable goals. With a simple Change of Beneficiary form, he made his wife a 50% beneficiary and Intermountain Foundation a 50% beneficiary. A decade later, after Don’s wife passed away, he had a year in which he could use a tax deduction to offset some of his unexpected taxable income. He decided to simply make an outright gift of the paid-up policy to us.

Eds Giftsoflifeinsurance

Consider your timing.

An outright gift of a life insurance policy must be completed by December 31 to qualify for a tax deduction this year. Because no charitable deduction is available for a beneficiary designation, you can create or change that type of gift at any time that works for you.

We can help.

We are happy to discuss various options for using a life insurance policy to make a charitable gift. If you are interested in a more complex strategy using life insurance—a strategy that allows you to make a gift of appreciated assets now, receive tax benefits, and “replace” those donated assets for your heirs using life insurance proceeds—please ask us for information about a wealth replacement arrangement. If you have already named us as the beneficiary of a life insurance policy, please let us know.

Glacier National Park
Colin Ware Cfre Mba

Contact Us

Colin Ware, CFRE  MBA
Foundation Gift Planning Officer
Intermountain Foundation

C: 303-257-2082