Gifts of Life Insurance - New Policy
How It Works
Questions and Answers
Probably not. The decision will depend on the specific circumstances. Although the face value of the policy is larger than any cash value within the policy, likely will surrender any policy that goes into default for nonpayment of premiums rather than apply non-budgeted unrestricted funds to cover the premiums due. will apply the proceeds from surrender to the purposes you’ve designated.
is grateful to be the beneficiary of any insurance policy, and all policies can provide important support for our mission. However, when ADL is made the owner and beneficiary of an insurance policy, we prefer whole life policies. This is because while premiums for term policies are a fraction of those required for whole life policies, term policies never build up internal cash value. This means that if you stop making gifts to cover the premium payments, or if the term policy expires naturally, will not benefit from the policy or your many premium payments.
If you have just purchased a new whole life policy, it is unlikely that the policy will have any internal value at the time you contribute it to . That means that the policy will not have a current value on which to base a charitable deduction. If you have already made initial premium payments, however, there may be a value on which a deduction can be based. Your life insurance company and accountant can help you determine whether the policy has a value that will allow you to claim a tax deduction. There is no deduction for a contribution of a term policy. Your future contributions to cover the premium payments are tax-deductible.
A gift of a new policy is irrevocable, and 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 professionals at our Department of National Planned Giving, Legacy and Endowments will be happy to discuss your interests, concerns and financial options, and work personally with you and/or your legal and financial advisors to create a plan that meets your needs and supports the Anti-Defamation League Foundation.
For more information, please contact:
Director of National Planned Giving, Legacy and Endowments
Anti-Defamation League Foundation (ADLF)
605 Third Avenue
New York, NY 10158
This information is provided for educational purposes. The Anti-Defamation League Foundation and ADL are not financial, legal or tax advisors. Please contact your advisors regarding your financial, legal or tax needs.