There are many advantages to life insurance as it can be a cushion against high-cost issues or a source of much-needed cash flow for your family. However, you might end up not needing it all. If this is the case, what do you do with the policy?
The good news is that you can kill two birds with one stone. Have you thought about donating your life insurance to a worthy cause?
WealthManagement.com explained the motive and the usefulness of the approach a short time ago in a recent article titled “Donating Life Insurance.”
What if it turns out that you won’t need that life insurance policy for which you scrimped to pay premiums over the years? Your children are grown and on their own, plus you have built up enough wealth to carry you and your spouse through retirement. Perhaps you have forgotten about that old policy sold to you by a college buddy when he was just getting into the business. In short, the policy is “found money” you really do not need now.
Consider this: your favorite charity could make good use of your policy and its eventual proceeds. Charities in the know are far more amenable to such unique gifts than you might realize. Now, instead of the eventual proceed being a potential tax burden to your estate, you can claim a current charitable deduction. Two birds with one stone.
Be sure to read the original article for more of the particulars. Then, before taking action, schedule a consultation with your estate planning attorney to make sure you connect all of the dots and get the best benefit while doing the most good.
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Reference: WealthManagement.com (March 18, 2014) “Donating Life Insurance”