A “Gift of Life Insurance” is made when you name a charitable organization of your choice as the beneficiary on a life insurance policy.
This means that you control the policy, and the organization would receive the insurance proceeds upon death.
There are a number of life insurance options available and each will have different types of tax benefits.
We encourage you to talk to a professional advisor (i.e. your lawyer, financial advisor, accountant etc.) who can help you decide which option(s) will work best for you and your family.
3 easy ways to make a Gift of Life Insurance
Purchase a new policy and name The FAD Foundation as the owner and irrevocable beneficiary. You will receive charitable donation receipts for the annual premiums paid by you each year. Receipts can only be issued for premiums paid AFTER the transfer of ownership to the charity. It is important to discuss this point with your agent before you make your first premium payment.
Transfer an existing policy by naming The FAD Foundation as the owner and irrevocable beneficiary. This could be a policy, for example, that was taken out to cover a mortgage that is now fully paid. We will issue a charitable donation receipt for the ‘fair market value’ instead of ‘cash surrender value’ and for any subsequent premiums that you pay in the future. This type of transfer of an existing policy could result in some taxable income; however, the tax credit you will receive from your donation will most often offset any tax due.
Name The FAD Foundation as a revocable beneficiary on a new or existing policy. Upon receipt of the proceeds following your death, a charitable donation receipt will be issued to your estate for the full amount.
NOTE: Another easy way to make a significant gift to the BTC that is often forgotten is to name The FAD Foundation as a beneficiary of your RRSP, RRIF or pension plan.