Charities do so much good in our communities - it's natural to want to support them with a final bequest. A charity may have helped you or a loved one, or just supports a cause that is dear to your heart.
Why should I leave money to charity using my death benefit?
Leaving your life insurance death benefit to a charity can help you pass on a larger gift than you would have been able to give during your lifetime. Your cost is just the sum of your payments into the policy, and your death benefit can be much more than that.
If you specify a charity as your beneficiary, your life insurance premium payments may even be tax deductible, as opposed to if you were to leave a donation through your estate. Thus, you are giving even more to your charity as your death benefit contribution will be tax-free. Having this money taken out of your estate may also even lower the overall percentage of any estate tax your family must pay on what you leave to them.
Additionally, in some cases, the annual insurance premium associated with having a charity as a beneficiary may even be tax-deductible, costing you less in taxes each year. You should consult your tax advisor before making such a gift to make sure it is structured properly. Neither the company nor its representatives give legal or tax advice.
To help ensure that your charity receives your life insurance death benefit, consider a permanent life insurance policy like whole life or universal life. Talk to your insurance professional about which policy is right for you.