Gifts of Life Insurance
Many people discover that life insurance provides an affordable way to make a significant gift to the Canadian Red Cross.
By giving through life insurance you can:
- make a substantial charitable donation for a comparatively small premium
- become a major benefactor right now, rather than waiting years to make your gift from accumulated assets
- gain tax benefits and guarantee the value of your gift will not be reduced by taxes, probate or administrative costs
- make a significant gift of funds that are considered independent of your estate, and therefore cannot be challenged
- keep your gift private and confidential.
There are many options for making a gift of life insurance. Some, like the first three listed below, can provide for a generous future gift while offering immediate tax relief. The method you choose will depend on your preference and circumstances.
Transfer ownership of an existing, fully-paid policy - Perhaps you hold a policy that, while fully paid, is no longer required as your family has grown or your financial situation changed. You can transfer ownership of the policy to the Canadian Red Cross and name it as the beneficiary. You will receive a donation receipt for the fair market value* immediately, just as if you had made a cash donation.
Sign over a partially-paid policy - When you transfer ownership of a policy that is partially paid and name the Red Cross as beneficiary, you will receive a tax receipt for the fair market value*, as well as for further premiums you pay on the policy.
Purchase a new policy and make the Red Cross the owner - When you make the Red Cross the owner and beneficiary of a policy, you are entitled to tax receipts for premium payments.
Make the Red Cross the beneficiary of your policy without transferring ownership - The proceeds of the policy will be paid to the Red Cross immediately upon your death. Now new tax regulations allow your estate to receive a charitable tax deduction for the amount of the insurance proceeds.
Make your estate the beneficiary of the life insurance policy, and bequeath the amount of the policy to the Canadian Red Cross in your Will - You will not receive tax benefits during your life, but your estate's tax liability will be reduced. However, your donation will be delayed while your estate is processed, and because your Will can be challenged or your estate reduced by fees/creditors, the full value of your intended contribution to the work of the Red Cross may be diminished.
* When you receive a tax receipt for the fair market value, you may have to claim some portion of the fair market value amount as income to offset the tax credit.
Whether you wish to support the continuing humanitarian work of the Canadian Red Cross in general or contribute to a specific program or in a particular region, through a gift of life insurance you can make an important difference in the future.
For more information, contact your local Legacy Representative.
