Giving Back with life insurance

Other than a Charitable Bequest (by your will if you have one) -

Through a gift of life insurance, you can make a substantial future gift to a charity at an affordable cost.

How It Works:

There are several ways to make a gift of life insurance:

* If you have a life insurance policy you no longer need, you can contribute it to a charity by naming the charity as the policy owner and beneficiary.  You receive an immediate charitable income tax deduction equal to the cash value of the policy.  If you choose to give the charity money to pay future premium payments, those cash donations are also eligible for a charitable income tax deduction.  At death, the life insurance proceeds are not included in your estate for federal estate tax purposes.

* Alternatively, you can purchase a new insurance policy on your life, name the charity as owner and beneficiary, and arrange to make cash donations to the charity for premium payment purposes.  Those cash donations to the charity for premium payments are then deductible on your income tax return.  At death, the life insurance proceeds are not included in your estate for federal estate tax purposes.

* Finally, you can simply name a charity the beneficiary of a life insurance policy you continue to own.  In this instance, there is no charitable income tax deduction available, but the proceeds of the policy at your death will not be included in your estate for federal

estate tax purposes

💡 Concept Overview

A non-qualified, tax-deferred annuity can be used not only for retirement planning—but also as part of a thoughtful charitable giving strategy.

With proper structuring, this approach may help you:

Support causes that matter to you

Provide for your family

Use assets more efficiently from a tax perspective

⚙️ How the Strategy Works

1. Fund a Tax-Deferred Annuity

You contribute to a non-qualified annuity, which grows tax-deferred over time.

2. Name Beneficiaries Thoughtfully

You may designate:

A charity or community foundation

Family members

Or a combination of both

3. Coordinate with Other Planning Tools

In some cases, clients choose to pair this strategy with life insurance or other assets to help balance benefits between family and charitable goals.

🎯 Potential Benefits

Tax-Deferred Growth

Earnings in the annuity are not taxed until withdrawn.

Flexible Contributions

Many annuities allow flexible premium payments over time.

Charitable Impact

Naming a qualified charity or community foundation as beneficiary may help support long-term giving goals.

Estate Planning Coordination

This strategy may help align financial assets with your personal values and legacy objectives

🏛️ Community Foundation Option

Instead of naming a specific charity, you may choose to name a community foundation fund as beneficiary.

This may allow:

Ongoing charitable distributions over time

Support for multiple organizations

Family involvement in future giving decisions (depending on structure)

📊 Simple Illustration (Hypothetical)

Total contributions over time: $150,000

Value at death: $300,000

Depending on beneficiary designations and overall planning:

A portion may go to family

A portion may support charitable causes

Actual results will vary based on performance, withdrawals, and planning decisions.

⚠️ Important Considerations

Withdrawals from annuities may be subject to ordinary income tax

Early withdrawals may incur surrender charges and/or tax penalties

Beneficiaries of annuities may be responsible for income taxes on gains

Charitable and tax outcomes depend on individual circumstances

Proper beneficiary designation is critical to achieving intended results

🧠 Is This Right for You?

This strategy may be appropriate for individuals who:

Are charitably inclined

Want flexibility during their lifetime

Are seeking ways to coordinate retirement and legacy planning

📞 Next Step

To explore whether this approach may fit your situation, consult with a qualified professional.

📌 Important Disclosure

This material is for informational purposes only and is not intended as tax, legal, or investment  advice. Guarantees are based on the claims-paying ability of the issuing insurance company. Individuals should consult with their tax advisor, attorney, and financial professional before implementing any strategy. Products and features may vary by state and carrier.

Contact Information

Sadler Hayes Associates, Inc.

📧 sadlerhayes@gmail.com

🌐 www.thinklegacylife.com⁠�

📞 845-639-0492

Everyone should make a will or living trust, regardless of wealth.  Having a plan in place ensures that your wishes are known and saves your  loved ones the stress and cost of intestate probate proceedings.   Create a free will or trust to support the people and causes you care about most even after you’re gone.