Do you have an old life insurance policy sitting in a drawer at home? It had a purpose once, but now this forgotten or unwanted life policy is just lying there gathering dust.
That old life insurance policy could still do a lot of good today. Have you ever considered donating it to your favorite charity? Most people don’t often think of life insurance and charitable giving together, but it’s one of the most overlooked methods to make an impact on your community. And while it is true that the charity will not have an immediate benefit from this gift (you do have to die before the charity receives the funds, after all), the charity stands to gain a real windfall in the future.
Why would you want to give an existing life insurance policy to charity? Well, because you may no longer have a need for the insurance. Maybe your children have all moved out from home and you and your spouse have more than enough to live on. Perhaps the insurance no longer serves the income protection needs that it was purchased for and you may not have an estate planning need for it. There are any number of reasons why you may decide you don’t need the policy anymore. But since you’ve paid into it for so long, rather than dropping the policy, donating it to your favorite charity offers an opportunity to create a substantial legacy that will survive long after you are gone and have a lasting impact on countless lives for generations to come.
Whether it’s a big policy or a small one, a term policy, or maybe one with some cash value, you can still leave a legacy. Permanent life insurance policies, of course, like whole life or universal life policies, are the best types to donate, for two reasons: since the insurance is permanent, the insurance death benefit will always be there and will eventually be paid to the charity. Permanent insurance also typically has cash values, so if the charity is not interested in keeping the insurance in force until the donor’s death, they can cash in the policy for its cash surrender value. If premiums still need to be paid on the policy, you can always gift them to the charity as additional donations. Regardless, you’ll receive an income tax benefit from the charitable donation.
One hundred years from now, no one will remember what house you lived in, what kind of car you drove, or what you did for a living. What they will remember, though, is the legacy you left for the generations to come. It’s never too soon to be intentional about the legacy you will leave. You can make a difference. And you can leverage it to a more significant difference through life insurance. What’s your legacy?