Tell Your FriendsGifts of Life Insurance
Two types of life insurance are typically donated to the National Park Foundation: paid-up whole and universal life insurance policies, and newly issued whole and universal life insurance policies. You have several options:
- make the National Park Foundation the beneficiary of an existing policy and earn an estate tax charitable deduction
- make NPF the owner and beneficiary of an existing policy, thus removing it from your taxable estate and earning an immediate income tax deduction approximately equal to the cash value of the policy (future premiums are tax deductible)
- take out a new policy with NPF as the owner and beneficiary (all premium payments are tax deductible)
- use in conjunction with a life-income gift to “replace” for your heirs an asset that you have given to NPF
For example, a number of years ago Harry Oliver purchased a $50,000 whole-life policy to ensure funds for his children’s education. The annual premium for the policy is $1,000. His children have graduated and are now financially independent. The policy, which he still owns, has a fair-market value (usually very close to the policy’s cash value) of $22,000, and the net premiums paid equal $23,000.
Harry assigns the policy to the National Park Foundation. In his 31% tax bracket he realizes an immediate tax savings of $6,820. In future years, Harry increases his annual gifts by $1,000 a year to the foundation that, in turn, pays the insurance premium. Harry realizes an annual tax deduction of $1,000, based on his annual gifts for that purpose.
For more information about using your life insurance to help the National Park Foundation, please contact NPF Development, at (202) 354-6460 .
