Life insurance planned gifts usually appeal to persons whose needs and family situation may be subject to change. The proceeds of any whole life or term policy may be paid directly to the institution or, if tax of the estate is a concern, to an estate with a bequest of an equivalent amount and the value of the gift is eligible for donor recognition in perpetuity. Life Insurance - Museum named as owner Another aspect of life insurance planned giving is where a donor purchases a policy with the Museum named as the owner. This type of planned gift is suited to those who have an older insurance policy that is no longer needed or who want to make a large gift but have limited resources. The donor pays the annual premiums and receives a tax receipt for their value plus the cash value of the policy when it is paid up.
Donor recognition occurs as the premiums are paid and when the policy is paid up.
This is an attractive form of planned gift of cash, securities or real estate because the donor keeps the gifted property or the income from it for life and also receives an income tax receipt. It appeals to those who need the use of their income but wish to provide for the Museum in the future and still receive current tax relief. The amount of the receipt is for the residual interest of the trust and is determined by a formula. This is a variation on the remainder trust planned gift with respect to cash or securities. This will appeal to older donors wishing to have guaranteed life payments all, or substantially, tax free.