You may have purchased a life insurance policy at a time when it was prudent to protect your family from financial hardship in the event of your unexpected death. Now, you might find yourself in a situation where your children are grown and independent, your mortgage is paid off, and you have accumulated sufficient assets in your estate to pass on to your family.
Your life insurance policy may now have a new purpose to serve. Its value could provide generous support to the Rochester Regional Health hospital or care program that means the most to you.
You may want to gift your life insurance policy if…
- Your policy is paid up or has substantial cash value.
- Your family is well-provided for by other means.
If this is the right gift for you, consider making it in one of the following ways:
1. Give your policy to Rochester Regional Health
We will either cash in your policy and use the proceeds to address areas in greatest needs of support (unless you specify their use) or maintain the policy until it ends, and then receive its face value. Choosing this gift would provide you with a couple benefits:
- An immediate income tax charitable deduction for the value of your policy
- No change in your cash flow
2. Designate Rochester Regional Health as the beneficiary of your policy
If you chose to do this, when your policy ends, we will receive some or all of your policy's death benefit, as you have designated. In addition to having the ability to change your mind at any time, you will also enjoy these benefits:
- The death benefit of your policy will not be included in your estate, which may save estate tax if your estate exceeds the applicable exemption amount.
- No change in your cash flow.
Justine Grant bought a $250,000 life insurance policy for herself shortly after the birth of the first of her four children. Her policy has been paid-up for years and her children, who are now in their 40s and 50s, no longer need the financial protection the policy provides. The cash value of her policy is now over $90,000, and she's paid $75,000 in premiums.
Justine has enjoyed a relationship of many years with Rochester Regional, and would like to honor their relationship with a significant gift. However, she has been reluctant to use her liquid assets to make the gift. When Justine learns that her policy can be put to a new and productive use, she is delighted. She arranges with her insurance agent to donate her policy to Rochester Regional Health.
- Justine will earn an immediate income tax charitable deduction of approximately $90,000, providing tax savings if she itemizes.
- Her $250,000 death benefit will not be included in her estate.
- She has the satisfaction of making a generous gift to Rochester Regional Health Foundations without reducing her income level.
- As the policy owner, Rochester Regional can either cash in the policy and have over $90,000 to work with immediately, or hold the policy and receive $250,000 as a legacy gift from Justine.