Carl and Cathy are well aware of the substantial tax advantages of making charitable contributions as well as the good feeling they get by helping their favorite charity. In addition to their annual contributions, they would like to bequeath more substantial amounts to their chosen charity in their wills. Some of their more affluent friends do this. However, Carl and Cathy do not feel that they are able to.
They would like to endow their favorite charity at a relatively low cost and get some tax relief in the process. Life insurance may offer an answer to both these wishes.
The procedure is quite simple. They apply for insurance on their lives, or use existing policies, naming the charity as the new owner and beneficiary. They pay the premiums and the charity gives them a tax-deductible receipt each year for the amount of the premiums paid.
Some reasons life insurance is particularly well suited as a vehicle for making this special gift are:
The whole concept of charitable giving through life insurance is based upon the understanding that the premium donations are expected to be in addition to the donor's current support.
*Fictional characters for illustrative purposes only.
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