|
|
Gifts of Life Insurance - Paid-Up Policy
How It Works
- You transfer ownership of a paid-up life insurance policy through a change of owner form to the WVU Foundation.
- WVU 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 lesser of the policy's fair market value (determined by an appraisal if more than $5,000) or the cost basis (such as premiums paid).
- 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 support West Virginia University without adversely affecting your cash flow.
 Please contact us so that we can assist you through every step of the process.
 Questions and Answers
 The policy is currently generating dividends sufficient to cover premiums. If dividends later are insufficient, will the WVU Foundation make up the difference?
If the dividend account becomes underfunded in the future, the WVU Foundation will contact you to learn whether you are willing and able to make cash contributions to cover the premiums as they are due. You will be eligible to claim a charitable income tax deduction for your contributions. Except in extraordinary circumstances, the Foundation’s practice is to surrender policies whose premium payments are not covered by donor contributions rather than tap unrestricted gift funds to do so.
How do I determine the amount I can claim for a charitable deduction?
If your policy is paid-up (in other words, no further premium payments are expected to be due and the policy is currently self-funding), you will be eligible to claim a charitable income tax deduction equal to the lesser of your cost basis in the policy and its replacement value as determined by a professional appraisal (if more than $5,000). Your life insurance company and tax advisor can help you determine the proper amount you are eligible to claim.
What if I later need the policy unexpectedly?
A gift of a paid-up policy is irrevocable, and the WVU Foundation will not be able to give the policy back to you once you’ve made your gift. Thus, it’s important to consider possible future needs before deciding to contribute your policy to the Foundation.
|
Next:
