Gift Planning

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Life Insurance

A gift of life insurance that you no longer need can be an easy way for you to provide generous support to Brigham and Women's Hospital (BWH).

A gift of life insurance could be right for you if:

  • Your life insurance policy is paid up or has substantial cash value
  • You have no loan outstanding against the policy
  • Your family is well provided for by other means
  • You would like to make a generous gift to BWH

How it works

Option 1:  You give your policy to BWH.

As the policy owner, BWH will either cash in your policy and use the proceeds, or maintain the policy until it ends and then receive its face amount. Your benefits will include:

  • An immediate income tax charitable deduction for the value of your policy
  • No change in your cash flow
  • The satisfaction of making a generous gift to BWH
     

Option 2:  You designate Brigham and Women's Hospital (BWH) as a beneficiary of your policy.

When your policy ends, BWH will receive some or all of your policy's death benefit, as you have designated. Your benefits will include:

  • The death benefit of your policy will not be included in your estate, which may save estate tax
  • No change in your cash flow
  • The satisfaction of making a generous gift to BWH

This option offers the additional benefit that you can change your mind about your gift at any time should circumstances in your life change. 

Your life insurance may have a new purpose to serve
You may have purchased a life insurance policy years ago when you wanted to protect your family from financial hardship in case of your untimely passing. Now that 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, you may no longer need your life insurance policy for its financial protection.

If this is your situation, consider making a gift of your life insurance policy to Brigham and Women's Hospital (BWH). The value of your policy can provide generous support to our mission without affecting your cash flow.

Give a paid-up life insurance policy
A paid-up life insurance policy is a policy that will stay in force without any additional premium payments. A paid-up life insurance policy is a valuable asset and makes an excellent gift. 

When you give your paid-up insurance policy to us, we will either cash in the policy immediately and use the proceeds, or maintain the policy until maturity and receive the death benefit of the policy.

Because this kind of gift is irrevocable, you will receive an income tax charitable deduction for the value of your gift at the time you transfer your policy to us. You will also remove your insurance from your estate, potentially saving estate taxes, as well.

In order to make your gift, you must assign BWH all ownership rights to your policy and make BWH the irrevocable designated beneficiary of the policy. Usually this can be accomplished by completing a simple form from your insurance provider. Be sure to identify us as: Brigham and Women's Hospital, Inc., 116 Huntington Avenue, 3rd Floor Boston, MA 02116, Federal Tax Identification Number: 04-2312909/04-2768256

Make BWH a designated beneficiary of your policy
Another great way to make a gift to us with your life insurance policy is to make BWH a designated beneficiary of your policy. When your insurance reaches maturity, we will receive the amount or proportion you designate. You can change your designation at any time, giving you the flexibility to revise your gift for any reason.

Because your gift is revocable, you do not receive an income tax charitable deduction at the time you create the designation. Rather, your estate will receive an estate tax deduction for the amount your insurance policy distributes to us if your estate is subject to tax.

It is very easy to make BWH a designated beneficiary of your life insurance policy. Simply contact your insurance agent to make a change on your policy's beneficiary designation form. Be sure to identify us as: Brigham and Women's Hospital, Inc., 116 Huntington Avenue, 3rd Floor Boston, MA 02116, Federal Tax Identification Number: 04-2312909/04-2768256

Loan against policy will create taxable income
If you give a life insurance policy on which you have an outstanding unpaid loan, you will be considered to have sold your policy for the amount of the unpaid loan. As a result, you will have to declare a portion of the loan as taxable income. You may want to pay off your loan prior to making your gift in this case.  

If you plan to designate BWH as a revocable beneficiary of your policy, the existence of an unpaid loan against your policy will not affect your tax picture.

A few states will not allow you to give life insurance to a charity
For your gift of life insurance to be valid, your state of residence must consider a charity to have an "insurable interest" in your policy. Most states do, but verify that this is true in your state before you make your gift. 

Example of a Life Insurance Gift

Justine Grant bought a $250,000 life insurance policy on her own life 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 an association of many years with BWH, 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.

Benefits

  • Justine will earn an immediate income tax charitable deduction of approximately $90,000
  • Her $250,000 death benefit will not be included in her estate
  • She has the satisfaction of making a generous gift to Brigham and Women's Hospital without reducing her income level
  • As the policy owner, BWH 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