A Presidential Legacy: Using Life Insurance to Fund Your Charitable Vision
As we observe Presidents’ Day, we are reminded of the power of legacy—the idea that our actions and values can continue to shape the world long after we are gone. For many, this inspires a desire to support the causes they care about: a local university, a hospital, a religious organization, or an environmental non-profit.
However, many feel that they cannot make a “truly significant” gift without compromising their family’s financial security or their own retirement. This is where Life Insurance acts as a powerful “legacy multiplier,” allowing you to make a much larger impact than would be possible through cash donations alone.
- Naming a Charity as a Beneficiary
The simplest way to use life insurance for legacy building is to name your favorite non-profit as a primary or contingent beneficiary.
- Percentage-Based Giving: You can designate a specific percentage (e.g., 10%) of your death benefit to a charity.
- The Advantage: This allows you to provide for your family first while still ensuring that a meaningful gift is delivered to your cause. Because life insurance bypasses probate, the charity receives the funds quickly and privately, avoiding potential legal challenges to your Will.
- Donating an Existing Policy
If you have a permanent life insurance policy (like Whole Life) that you no longer “need”—perhaps your children are grown and your mortgage is paid off—you can donate the policy itself to the charity.
- Ownership Transfer: By transferring ownership to the non-profit, you may receive an immediate income tax deduction for the cash value of the policy.
- Continued Impact: If you continue to pay the premiums on the donated policy, those premium payments are generally tax-deductible as charitable contributions.
- Creating a “Wealth Replacement” Strategy
Some donors worry that if they give a large chunk of their estate (like a house or stock portfolio) to a charity, their children will receive nothing.
- The Multiplier: You can give the asset to the charity now (receiving a large tax break) and use the tax savings to buy a life insurance policy with a death benefit equal to the value of the donated asset.
- The Result: The charity gets the gift, the children get the insurance payout, and the “legacy” is fulfilled for everyone involved.
This Presidents’ Day, think beyond your own financial horizon. Life insurance is a tool that allows you to act with “presidential” vision—creating a legacy of kindness and support that will endure for generations. Speak with your financial advisor about incorporating charitable life insurance into your 2026 estate plan.
