You can make the Foundation the beneficiary of a life insurance policy, and your estate will receive a charitable deduction from estate taxes for that gift. You may also, under certain circumstances during your lifetime, make the Foundation the owner of a life insurance policy on your life, and receive an income tax charitable deduction for a portion of the face value of that policy.
In the event that a donor makes a gift by naming the Foundation as beneficiary of any life insurance policy, such gifts shall be recorded as revocable gifts.
A donor may make an irrevocable gift of life insurance by transferring both the ownership of a policy and beneficiary designation of a policy to the Foundation. In determining whether a policy may be accepted by the Foundation, the following considerations must be evaluated:
- Type of policy offered – Term or Whole Life. In general, term policies will not be accepted.
- Status of Policy offered – Paid up or Premium Due. In the event that a gifted policy shall have premiums due, it is the expectation that the donor will make future premium payments, which shall be made through the Foundation and treated as an additional cash gift in the year the contribution is made.
- Foundation Options Upon Receipt. With full disclosure to the donor, the Foundation reserves the right to any of the following options upon acceptance of a life insurance policy and in particular, regarding policies with premium due. If the donor stops paying the premium due, the Foundation may elect to continue the payment of premium; convert the policy to a paid up insurance policy; surrender the policy for its then existing cash value or any other option deemed appropriate.