What to Do with “Obsolete” Life Insurance

Do you have a life insurance policy you purchased years ago to provide financial protection—and no longer need it? If so, it may be a great asset to give Saint Leo University. Consider the benefits when you irrevocably name Saint Leo University as both the owner and beneficiary of the policy:

1. You receive an income tax deduction.
When you fill out your itemized tax return, you can claim a charitable deduction for the cost basis of the policy or an amount approximately equal to the cash surrender value. For deduction purposes, the gift is treated as though it were cash. This means you can deduct the gift up to 50 percent of your adjusted gross income. And if you cannot use the full deduction in the first year, you can carry forward the unused portion up to five additional years.

2. You reduce the size of your estate.
At death, the face value of most life insurance policies is includable in the taxable estate of the deceased. For some estates, this can mean a significant increase in estate taxes. However, transferring the policy during life will remove this “hidden” asset and reduce the size of your estate and any applicable taxes.

3. You leave your current income undisturbed.
Many people want to give more to Saint Leo University, but they are concerned about their own cash flow and any unforeseen emergencies. They are reluctant to reduce investment assets. We at Saint Leo University do not want any of our friends to jeopardize their financial security in making charitable gifts. At the same time, it is quite possible that you either have forgotten about an “obsolete” life insurance policy or consider it an unneeded asset. In any case, the advantage of giving such a policy is that it does not affect your current income stream.

 

Next Steps

  1. Contact Stephen Kubasek, director of Planned Giving, at (352) 588-8355 or stephen.kubasek@saintleo.edu for additional information on giving personal property.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Saint Leo University in your plans, please use our legal name and federal tax ID.

Legal Name: Saint Leo University
Address: PO Box 6665 - MC 2227, 33701 State Road 52, Saint Leo, FL 33574
Federal Tax ID Number: Please contact us for our federal tax ID number.

 
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results.