Gifts of Life Insurance

Life insurance is a powerful way to make a significant future gift to Citadel Foundation at a current low cost. There are several ways you can use life insurance, the most common is donating the proceeds of an insurance policy, donating a policy you no longer need, or buying a new policy, Citadel Foundation being the beneficiary.


Giving the proceeds of the policy

Several years ago, John took out a life insurance policy, his wife as beneficiary, to provide security for his family. John is now a widower with sufficient additional assets to leave to his children. John has decided to donate the proceeds of the life insurance, payable upon death, to Citadel Foundation. John can change the name of the beneficiary from his wife to Citadel Foundation or simply bequest the proceeds form the life insurance in his will.  Either way a tax receipt will be issued to the estate offsetting taxes owed. If the donation receipt exceeds 100% of his income in the year of his death, the remaining portion can be carried back to the previous year.

Giving the policy itself

John has finished paying the premiums on a $50,000 policy. John would like to support Citadel Foundation, however does not have any other assets to donate other than his insurance policy.  By donating his Life insurance policy, John will receive a tax receipt for the full cash value of the policy  which he can apply against his earnings in the year of the donation. If the donation exceeds 75% of John’s income for the year, he can carry the balance forward for up to five years.

Giving a new Policy

John, 40 years old, would like to support Citadel Foundation. He has discretionary income but has not accumulated any assets to donate. John buys a $50,000 life insurance policy, names Citadel Foundation as the beneficiary and pays the annual premiums of $1,500 for five years. John receives a donation receipt and tax credit of $750 (assuming a combined tax savings credit of 50%) for each premium paid. In this case, John is able to make a substantial donation to Citadel Foundation which they will receive when he dies, for a limited cost of $750/yr for five years.

Wealth Replacement

(assuming a combined tax savings credit of 50%)

John, 55 years old, donates $100,000 cash to Citadel Foundation therefore saving $50,000 in taxes.  John uses $25,000 of his tax credit and purchases a life insurance policy for $100,000 naming his children as the beneficiaries.

As a result, Citadel Foundation receives $100,000 now, his children receive $100,000 upon his death, and he keeps *$25,000 he would have had to pay in taxes.

*the cost of the new life insurance depends on John’s health