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Life Insurance as a Vehicle for Charitable Giving

Jeff Wasser

Over the last several months the Endowment Board of Trustees (Tax ID 05 0540805) has highlighted the need for legacy giving and our collective obligations to strengthen and broaden our current programs and institutions as well as to sustain and nurture Jewish institutions for future generations.

In prior articles we have highlighted our collaboration with the Jewish Community Foundation, which allows BSBI Endowment to offer more sophisticated giving vehicles. Our collaboration may provide current and potential donors with the assurance that their charitable donations will support Jewish causes today and far into the future.

In this month’s edition of the Chai Lights, the Endowment would like to review some of the uses of life insurance as a vehicle for charitable giving. Life insurance is generally purchased to protect the financial health of dependents of the insured, such as one’s family or business. Life insurance may also be used to fund a charitable bequest.  There are several ways this can be accomplished.

  • A donor may make an irrevocable gift of an existing paid up policy. Tax benefits accrue to the donor as allowed by law
  • The donor may gift a new or existing policy that requires ongoing premium payments.  Premium payments are donated to the charity and are tax deductible as allowed by law. It is the responsibility of the charity to forward the premium payments to the insurance company.
  • The charity may be named as the beneficiary of a policy that the donor continues to own and for which the donor continues to pay premiums.

Other uses of life insurance include its ability to replace assets that have been donated to charity. Policies may also be combined with joint and survivor trusts or used to insure a charitable pledge. The use of life insurance for charitable giving may be complex and should only be undertaken with the advice of a qualified financial professional. If you are considering using life insurance as part of your charitable legacy please reach out to me at jeffreywasser@sbcglobal.net or Roy Filkoff at royfilkoff@altmanandco.com or BSBIEndowment@myshul.org.

Fri, March 22 2019 15 Adar II 5779