So we give a little each week or each month knowing that a little at a time over a long period adds up. But have you ever considered how much you will be giving over the next 20 or 30 years. It really adds up, for example if a 30 year old woman gave $10 a week to her church for 35 years (until she retires) she would have given the church $18,200 over that time. But what happens if she dies in an accident before age 65? The church will lose that income and have to make it up elsewhere. Not a huge monthly amount but if that happens a few times the church will be without thousands of dollars in income that it needs to maintain the building and continue the programs that cost more and more each year.
There is a way to insure that the charity (in this case her local church) will receive all that she planed to give over her lifetime regardless of how long (or short) that life is. If the same 30 year old woman (in good health and a non tobacco user) bought a traditional life insurance policy for the whole amount that she plans on giving to the church ($18,200) and she made the church the beneficiary, it would cost her about $4.20* each week (premiums would need to be paid for about 20 years until the cash value was high enough to allow for off set) ... if she then gave the church the remaining $6 a week her total gift to the church during the 35 years would be $14,040 but the church would get the death benefit of $18,200 even if something happened to her after her first payment on the life policy. If she lives to age 65 the church would have gotten her tithe of $14,040 from the previous 35 years and a death benefit of over $20,000* when she passes.
Life insurance can make sure that the amount of money you want to leave to a charity is a sure thing, and if you make the charity the owner of your policy and you just pay the premiums then your premiums can be tax deductable. This is the most common use for life insurance, that is to protect someone or some group from the financial loss associated with the premature death of a supporter. But there are other ways to use life insurance to increase your charitable gift after you pass away.
Let's say that a 65 year old woman loses her husband after they both had worked for a lifetime. His retirement was $1900 a month but she was living comfortably on her own retirement and decided to give that amount to the Humane Society to help fund the programs her husband supported for nearly 70 years. If she were to pass away in the first year the Humane Society would only get $22,800 ($1900 times 12 months) but if she were to use the $1900 a month to purchase a life insurance policy the Humane society would get nearly 3/4 of a million dollars* to continue the work her husband supported all his life.
Another example of using life insurance to expand your gifting to the charities you love is the Single Premium life policy. If you have a lump sum of money that you do not need for your income and you want to pass along to fund future building needs for your church a great option is to use it to buy a single premium life insurance policy. Let's say that a widower age 72 wants make sure his $50,000 CD is used for the church's future building projects he could greatly expand the benefit by purchasing a single premium life policy worth about $75,000* when he passes away.
The one thing to remember is that anyone that wants to use life insurance as a way to support their favorite charity must be insurable and if they have conditions that are ongoing such as diabetes you may get less for your money or you may not qualify for a policy at all. Your best bet is to talk to an Agent that you trust and let them know what you want to do ... they will be able to design a program that meets your needs and gets the money to your charity regardless of how much longer you live.
This is a really cool idea that deserves an extra look ... it is a great way to guarantee your gift or greatly expand it.
J
* all figures are general examples and are based on a person in good health that does not use tobacco and are only accurate for certain companies at the time of publication.
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