LIFE INSURANCE

Life insurance can be a tool with many purposes.

Life insurance can provide liquidity for paying taxes and other expenses at death.  However, some of the most satisfying uses for life insurance policies are connected with charitable giving.

Give an Existing Policy
You may own an insurance policy that has a substantial cash surrender value, yet the original purpose for the protection no longer applies. The policy might have been purchased initially to provide financial security for a spouse now deceased, to educate children now grown or for liquidity to pay death taxes when liquid assets were in short supply. This policy can be a hidden asset, available to be used for your philanthropic purposes.  You can name the Foundation for the Diocese of El Paso as the owner and beneficiary of a policy and receive an immediate income tax charitable deduction.

Purchase a New Policy
You can make a significant future charitable gift at a relatively low cost by purchasing a new life insurance policy.  For young people, this is a way to make a significant gift.  Retired individuals can use some annual discretionary income to perpetuate their support of a charity without depleting their financial reserves or reducing the projected inheritances of family members. Greater leverage is possible when two donors, usually wife and husband, purchase a two-life, second-to-die policy.

It should be kept in mind that the premium requirement may continue for a longer period, or even cease temporarily and then reappear, if the policy cannot generate enough cash value to keep the policy in force.

Create a Partial Beneficiary
There are other options available to donors interested in retaining ownership of a policy as an asset for financial security.  You can:

1. Name the Foundation as the only or a partial primary beneficiary of the policy, with the right to change the beneficiary clause as owner of the policy;
2. Name the Foundation as the contingent successor beneficiary, receiving the death benefits only if a named individual beneficiary predeceases you;
3. Create a separate trust named to receive death benefits, with terms providing first for financial support of one or more named individuals for specific terms of years or for life, after which the trust terminates and its assets pass to us.

For more information about giving the gift of life insurance, contact the Foundation for the Diocese of El Paso at 872-8412.  Ask to speak with the Catholic Legacy Fund staff representative to set up an appointment.

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