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Charitable giving through a life insurance policy

Charitable giving through a life insurance policy is a great way to donate to a cause by maximizing your contribution
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Helping others feels good, either through individual efforts or donating to charities. People have personal attachments to specific causes but need direction to provide support. Charitable giving through a life insurance policy provides a tax credit and increases your donation potential.

Scenario 1. Erin age 35 wants to donate to the Heart and Stroke Foundation. She canpurchase a $50,000 whole life policy that will ensure the policy stays in force. The monthly premium is $80 and after 20 years the policy is paid in full.

Scenario 2. Fred age 45 wants to donate $25,000 to Providence House a care facility that assisted his mother during her palliative care. Fred does not want to go through a medical underwriting. He can purchase an instant issue policy after answering 5 qualifying questions. The monthly premium for this policy would be $91 for 20 years. Tax credits are available for on-going premiums or on the final tax return of the estate depending when the policy is assigned to the charity.

In both cases the amount paid in premiums is less than the charitable benefit. Scenario 1 provides double the benefit with less premium. This stresses the point to purchase the policy at a younger age when premiums will be lower. Charitable giving through a life insurance policy is a great way to donate to a cause by maximizing your contribution. If you would like more information about the process, please contact me at dmenegotto@sutherlandinsurance or 519-822- 0160.

Happy Holidays.

Dave Menegotto
Account Executive, Sutherland Insurance

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