- How to use a life insurance policy for charitable donations
- February 17, 2014
It’s common knowledge that having the proper life insurance policy means having long-term financial protection, but what most people don’t know is that those policy proceeds can be used for charitable donations as well.
In a guest column in the Lafayette Advertiser, life insurance professional Georgianna Latino notes that policy holders can name chosen charities as beneficiaries to their policies and benefit from tax deductions.
Latino continued with ways in which your life insurance policy can benefit a favored charity. For example, policies that are no longer needed can be transferred to a charity. The transaction is exempt from the federal gift tax, whereas those who itemize their returns are eligible for a tax deduction.
Latino added that people can consider designating the charity as a beneficiary, which allows the beneficiary to maintain full control over the death benefit. If the insured wishes to maintain control over the policy after they have passed, they may consider creating a charitable trust.
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