Many individuals own or purchase a life insurance policy at some point in their lives. A life insurance policy may give you peace of mind, and serve as financial protection in the event tragic events strike your family. It can serve as an inheritance for loved ones, or an investment strategy for your future.

As our situations change over time, the life insurance policy may not be needed for its original purpose. Many people have life insurance policies that are no longer needed to protect their spouse, family or themselves. A good example might be a policy for a grown child’s education. When the ownership of an existing policy is given irrevocably to the church or the Foundation, (as opposed to designating the church as a beneficiary) you can immediately deduct, as a charitable contribution, the current value of the policy or, the net cost of the policy, whichever is less. Upon transfer of the ownership, future premium payments are also deductible. Once the church is the owner and beneficiary of the policy, the church may hold or surrender the policy. In many cases, the church will hold the policy until the donor’s death.

You may designate your church as the beneficiary of your life insurance policy by giving all or a percentage of your policy for ministry simply by adding your church as a beneficiary through a change of beneficiary form available from your insurance agent. You maintain full control of the life insurance policy during your lifetime and your church will receive the insurance proceeds at your death. You will not receive a charitable income tax deduction for this gift, because you have not made an irrevocable charitable contribution. Since you retain ownership of the policy, you may at a later date, elect to change the beneficiary.

Family obligations and the need to provide for retirement, coupled with the high cost of living, make it difficult for many people to consider substantial gifts now. Using available life income arrangements, you are often able to provide needed income, reduce taxes and, at the same time, make a gift that will have a substantial impact on the future of your church.