Many people have one or more life insurance policies in order to provide
security for loved ones, as a savings plan, to provide funds to pay estate
settlement expenses and taxes, and to make meaningful charitable gifts. Life
insurance gifts generally do not go through probate-they are immediate,
private, economical, flexible, and convenient. Naming the church as a
beneficiary on a life insurance policy is one possible statement of your
deepest values.
Will a life insurance gift work for me?
Naming the church as a beneficiary on your life insurance may be a
convenient way to make a charitable donation if you have a policy that was
intended for
- a spouse who will not need it;
- a child who is now financially independent;
- covering the expense of federal estate taxes, which may no longer apply
to your estate; (As of 2002, up to $1 million can be left to heirs tax
free. This eliminated estate tax liability for about 98 percent of
Americans, leaving more insurance proceeds available for loved ones and
charity.)
- paying off a mortgage that has already been paid in full;
- providing retirement income, which has been accumulated through other
retirement plans;
- paying for a child’s education, which is already completed or funded
by other means;
- protection of a business that no longer needs it;
- protection when you were a child, such as a policy purchased by your
parents.
How do I name the church as a beneficiary?
There are a variety of options when naming the church as a beneficiary on
a life insurance policy. You can name the church as
- a primary beneficiary to receive part or all of the proceeds from a
policy;
- a secondary beneficiary to receive part or all of the proceeds from a
policy in case one or more primary beneficiaries die before the policy is
paid;
- final beneficiary to receive part or all of the proceeds in case all
other beneficiaries die before the policy is paid;
- the only beneficiary on a life insurance policy purchased with the
intention of using it to make a meaningful gift to the church.
Tax Benefits
Naming the church as a beneficiary on a life insurance policy can be an
affordable, tax-efficient way to make a charitable gift. See the table below
for examples:
|
Life Insurance Gift |
Tax Deduction |
|
A policy that is paid in full |
Approximate cash surrender value* |
|
A policy on which premiums are being paid |
Approximate cash value* and future premium payments |
|
Purchase new policy to give to the church |
Premiums |
|
Assign dividends to the church |
Value of dividends |
|
Purchase policy to guarantee a pledge to the church |
Premiums (if church is named owner/beneficiary) |
|
Name the church as primary, secondary, or final beneficiary on owned
policy |
Premiums are only deductible if the church is also named owner |
|
*If net premiums are less than cash surrender value, federal income
tax deduction is limited to net premiums paid. |
|
Note: There is potential taxation on life insurance gifts not given
to charity as a result of estate tax. |
Gifts can be directed for the benefit of the World Church and/or subsidiary
jurisdictions. To benefit the church with proceeds from a life insurance
policy, name the beneficiary as “Steve Jones, Presiding Bishop,
Community of Christ, a church with headquarters in Independence, Missouri, and
his successors in office, for the use and benefit of said church.” For
assistance, contact Estate and Financial Planning at
efp@CofChrist.org
or 1-800-884-7526 (1-877-526-7526 in Canada).
