Life Insurance

A gift of life insurance is a legacy gift that most don’t think about. However, it is not only powerful and simple to arrange, it allows people with relatively small cash savings to make a large cash gift to charity upon death.

There are three ways to donate through a life insurance policy:

  1. Donate an existing life insurance policy – naming the charity as the owner and beneficiary;
  2. Purchase a new life insurance policy – designating the charity as the owner and beneficiary; or
  3. Donate a new or existing life insurance policy through your Will – naming the charity as the beneficiary, but not the owner. This can be a personal or group life insurance policy.

Each option offers different tax advantages which may make sense at different stages of life.

Benefits (Options 1 & 2):

  • Can be structured so that you receive tax benefits now and throughout your lifetime.
  • Immediate charitable income tax receipt for the cash value of the policy that you can use to off-set your current income.
  • Annual charitable income tax receipt for any premiums paid to keep the policy in force after the transfer.
  • Make a significant future gift with little or no cash outlay today.
  • If the policy is fully paid at the time of transfer, there are no more premiums to be paid, yet there will be a significant future gift.
  • Insurance policy proceeds paid to the charity upon death are not included in your estate and are not subject to probate fees.

Considerations (Options 1 & 2):

  • Ownership of the policy must be transferred irrevocably in order to qualify for an immediate charitable income tax receipt.
  • The policy cannot be returned to you if your financial circumstances change in the future.

Benefits (Option 3):

  • Make a significant future gift while retaining full ownership (and control) of the policy.
  • Modest premium payments today translate into a significant future gift.
  • Upon death, the insurance proceeds are paid directly to the charity. This occurs outside of your estate and therefore is not subject to probate fees.
  • Charitable income tax receipt will be issued to your estate for the policy proceeds, which can be used to offset taxes payable upon death. Note: you will not receive a charitable income tax receipt while alive.


The legacy giving information on this website is provided for general information purposes only. It is not intended as legal or financial advice. It is meant to help facilitate discussions between you and your advisors. We strongly recommend that you discuss your intentions with your family and consult with your lawyer and/or financial advisor before proceeding with a legacy gift.