Gifts of Life Insurance
A gift of life insurance is an easy and affordable way to make a difference. A modest annual premium paid over time can result in a significant future legacy to Memorial University of Newfoundland.
Gifts of life insurance have several advantages for the donor.
- Gift of life insurance do not form part of the estate and are exempt from probate fees
- You can choose when you receive the tax benefits (depending on whether or not you retain ownership of the policy)
- Life insurance offers a private way to give as it is not a matter of public record
There are several ways for you to make a gift to Memorial using life insurance:
Donate an existing policy – You may donate a paid-up life insurance policy that has outlived its original purpose by naming Memorial as the owner and beneficiary of your policy and receive an immediate charitable tax receipt for the fair market value of the policy
Transfer the ownership of an existing policy on which premiums still owe – This type of gift is most suitable for donors who have the cash flow to continue making premium payments. You would receive a tax receipt for the fair market value of the policy and tax receipts for subsequent premium payment.
Name Memorial as the owner and beneficiary of a new Policy – You may purchase a new life insurance policy and name Memorial as both owner and beneficiary of the policy. You can choose to pay the premiums directly to the insurance company, or make a donation to Memorial equivalent to the cost of the premiums and Memorial will make the policy payments. The premiums are eligible for a tax receipt, making this an inexpensive way to leave a substantial legacy.
Designate Memorial as the Beneficiary Only of a New or Existing Policy - You may designate Memorial as the beneficiary of a policy for which you retain ownership. In this case, your estate will receive a charitable tax receipt for the value of the death benefit. This receipt can be used to offset tax payable on the final tax return. This is quite beneficial if you’ve accumulated assets that would be subject to a significant tax liability upon your death. It may allow your heirs to receive a higher value of your estate while also supporting the university.
Note: If the donation receipt exceeds the net income in the donor’s final tax return, it can be carried back to the previous year.