Life Insurance: Changing beneficiary designations or ownership of a life insurance policy is easy and costs nothing. Often a donor can simply download a form from the insurance company’s website, fill in the name of the charity as a beneficiary, and send it back.
A donor can easily make TMI a beneficiary of a life insurance policy (or one of the beneficiaries) or make TMI the owner of a paid-up whole life policy (and receive a tax deduction for this gift).
Example: Ginny owns a paid up insurance policy she bought when she was 25, with a death benefit of $50,000 and a current cash value of $45,000. She long since finished making premium payments on the policy, and no longer needs it. She can give the policy to TMI and receive a tax deduction for roughly the $45,000 cash value.
Example: Pete has a life insurance policy with a $100,000 death benefit. His children are the primary beneficiaries, and he wants them to benefit from the policy, but he also wants to leave a legacy. Thus, he designates TMI as a 10% beneficiary of the policy, guaranteeing a $10,000 gift at his death.
