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Gifts of Life Insurance - Paid-Up Policy
How It Works
- You transfer ownership of a paid-up life insurance policy to the ACLU Foundation.
- The ACLU Foundation cashes in the policy now or maintains it and receives the death benefit later.
Benefits
- You receive gift credit and an immediate income tax deduction for the cash surrender value of the policy.
- In some cases, you can use the cash value in your policy to fund a life-income gift, such as a deferred gift annuity.
- You gain the satisfaction of making a significant gift to the ACLU Foundation without adversely affecting your cash flow.
 Please contact us so that we can assist you through every step of the process.
 Questions and Answers
 How are the annuity payments guaranteed?
A gift annuity contract becomes a legal financial obligation of our charity and is backed up by all our assets.
Is it better to give cash or appreciated securities for my gift annuity?
Both have distinct advantages. A gift of cash will produce a larger tax-free portion of the annuity. A gift of stock can increase your income because of reduced capital gains cost. Both assets produce an equal annuity rate and charitable income tax deduction.
Can I include my children as income beneficiaries of my gift annuity?
A charitable gift annuity can only be set up for one or two lives. This is typically a husband and wife, but it could be two siblings, or two friends, etc. Beneficiaries must be at least 55 at the time of the gift.
What’s the difference between a commercial annuity and a charitable gift annuity?
A commercial annuity, typically sold by banks and life insurance companies, will provide the owner with fixed or variable income based on commercial rates of return. These plans establish their annuity payments based on the assumption that all of the assets in the plan will be used up by the end of the income beneficiaries' lives.
A charitable gift annuity is part guaranteed annuity and part charitable contribution. The donor receives a partial income tax deduction based on the assumed value of the portion of the gift the charity will ultimately receive. A gift annuity establishes its payments on the assumption that there will be something left for the charity at the end of the contract. Often annuity rates for gift annuities cannot compete with the annuity rates of a commercial annuity because of the charitable component in the contracts. But then, there are fewer tax benefits with a commercial annuity.
Can I defer my annuity payments?
Yes, you can make a gift now for an annuity contract that will defer your payments to a future date that you decide, typically sometime in your retirement years when you will need the income. In this sense, a deferred payment gift annuity can serve as a type of tax-deferred savings plan that will provide you with guaranteed income in the future.
Questions? We're here to help. Email us or call toll-free 877-867-1025.
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