Life insurance can be a useful and low-cost way of making a charitable gift. It often makes a larger gift affordable.

There are four ways to make a gift of life insurance:

  1. Donated Policy: The premiums you pay are eligible for a charitable income tax credit each year and proceeds are paid from the insurance company directly to the charity upon your death. The proceeds are not reduced by taxes or fees from an estate.
  2. Making a charity a direct beneficiary of a policy: The premiums you pay are not eligible for a charitable income tax credit each year but when the proceeds are paid from the insurance company directly to the charity upon your death your estate will receive a receipt for the full amount. The proceeds are not reduced by taxes or fees from an estate are usually a major factor in tax savings in an estate plan.
  3. Making the charity a beneficiary of your insurance policy in your Will: The premiums you pay are not eligible for a charitable income tax credit each year. The proceeds of the policy are paid from the insurance company to your estate upon your death. Although your estate will receive a receipt for the full amount, the proceeds are reduced by taxes and fees as well as being vulnerable to any challenges to the estate.
  4. Gifting a paid up life insurance policy: Anyone can make a current gift of a paid up life insurance policy with a cash surrender value – you would receive a receipt immediately upon the gift being made.

Many parishioners consider including a charity as a beneficiary as a contingency in the event of an accident involving both spouses.

Most importantly you need a proper insurance advisor. If you do not have one the Archdiocese maintains a list of Catholic Advisors near your parish and can provide a list for you to contact and consider.

If you have any questions, please do not hesitate to contact Margaret, in our parish office, at 416-926-7110 or office@stbasiltoronto.org.