Charitable Gift Life Insurance

You went to college and paid six figures for the pleasure of an education. Right after your graduation, the college sends you a letter asking you for money. You just purchased a $150,000 education, and their first instinct is to ask you for money.

Think about that for a minute. When you buy, say, a Ford Focus, do you get a letter from Ford two years later that says: “We hope you are happy with your car. Would you like to send us some money for no reason?”

Anyway, years later, you’re now in your 40s. You have life insurance, and your college is at it again. Instead of asking you to donate more money to them, they have now asked you to add them as a beneficiary in your life insurance policy. That’s right. They’re asking you to die and give them money.

There are typically three ways to gift life insurance to a charity or non-profit organization (or universities, because they make money).

• You can name the charity as a beneficiary on your life insurance policy.
• You can make an outright gift of an existing policy. By choosing this option, every premium made is tax-deductible.
• You can take out a new policy and name the charity as the beneficiary. By choosing this option, every premium made is also tax-deductible.

There. Now you've been, uh...schooled.