Individuals who desire to give to Young Life have many options on how to give. One of the most effective means to maximize giving is to use the gift of life insurance. There are several ways to give life insurance. While there are many different types of life insurance, the principle of giving remains the same: a relatively small present gift will ultimately provide a much larger gift in the future. The following will explain how this works:
Gifts of Existing Insurance
You have a life insurance policy in force which:
- is no longer needed to provide for the survivors of the person who is insured;
- will add to the size of someone's taxable estate without providing any real benefit to survivors;
- is an old policy and does not provide a good economic return for the owner's planning purposes.
These policies can be given as a current gift to Young Life. In so doing, the charity would receive:
- a large gift at the death of the insured;
- the potential of using the cash value in the policy for current needs, if a policy which has cash value is donated.
In return for giving the policy, the donor receives a:
- current tax deduction for the amount of the cash value in the policy;
- reduction in the size of the donor's taxable estate (if applicable).
Example
A 60-year-old person owns a policy with a $100,000 death benefit, which has been in force for 15 years and has $15,000 in cash value. When given as a gift, the following occurs:
- The charity will receive $100,000 at the time of the insured person's death. (Therefore, a small gift of $15,000 will provide a much larger gift of $100,000 to the charity.);
- The charity can utilize the cash value of the policy should the need arise;
- The $15,000 cash value will provide an immediate charitable tax deduction for the gift donor;
- The donor will reduce the size of his or her taxable estate by the amount of the death benefit — $100,000. This would result in reducing the estate taxes owed by up to $55,000, depending on the donor's estate tax bracket if it is a taxable estate.
Another way to give life insurance as a gift is to donate only the death benefit of the policy. In this case, the insured or owner of the policy would give the death benefit to the charity by designating it as the beneficiary of the policy. The donor would retain ownership and control of the policy while still giving a gift to charity at death. This would keep the death benefit out of the policy owner's estate but still allow him or her to retain the use of the policy's cash value while he or she is still alive.
To receive additional information, complete the confidential online
Gift Planning Information Request Form.
For all questions on how to set up credit card gifts, electronic fund transfers, a lost receipt or any other general giving questions, call Young Life Mission Assistance at (877) 438-9572.
For more information on setting up a planned gift to benefit Young Life, please contact:
Jeff Rudder
Director of Donor Services
Young Life Foundation
P.O. Box 520
Colorado Springs, CO 80901-0520
Phone: (800) 813-1945
Fax: (719) 381-1740
E-mail: inquiries@foundation.younglife.org
*The information contained herein is for explanatory purposes only and is not intended to be used as tax advice. Young Life recommends that you contact a professional tax advisor who can provide you with additional information on how your participation in the above program may affect your personal tax situation.