Andy Lappan

Are there any charities that have a special meaning to you, your family, or your friends? Do you ever wish you could make a real impact on our community through a local organization, but don’t know where to start?

If money were no object, there are likely several area causes you’d support, but sometimes your bank account doesn’t support what you wish you could do. But you don’t have to forgo the chance to leave a legacy of generosity behind in the community you love just because you’re not a millionaire. Purchasing the right kind of life insurance can be a great way to give back to worthy organizations that benefit the community. That type of charitable contribution can be divided between numerous organizations, such as nonprofits, churches, colleges, charities, clubs, private foundations, and hospitals.

There are life insurance policies that can be specifically utilized for charitable giving. Contact your agent to find the best option for you. One example would be whole life, a type of permanent life insurance policy that offers a saving component called cash value. Over time, the cash value builds and you are able to withdraw funds or borrow against it.

Two types of life insurance policies are single-pay whole life or 10-pay whole life. There are many benefits to having either policy, including the fact that both can be used for charitable giving. You can choose between making a one-time payment to have the premium paid in full or make payments for 10 years to cover the entire life of the policy. Because the premium is fixed, you likely won’t have to worry about payments when you’re older and/or experience a reduction in income.

By selecting a single-pay or 10-pay whole life policy, you’ll be creating a gift for your chosen organization(s) and the money they receive will be a greater contribution than the premiums you paid into the policy. Your charitable gift may also qualify as a tax deduction for the premiums paid and result in a reduction in size of your taxable estate.

Upon your death, the benefit will be paid directly to the charity named as the beneficiary, and that legacy will live on after you are gone. Choosing that type of life insurance policy to make a charitable gift may also result in avoiding the complications of probate or estate settlement.

To have your life insurance payout be considered a charitable contribution, your chosen foundation generally needs to be the owner and beneficiary on the policy. You, the insured, will pay the policy’s premiums. If you already have a current life insurance policy, you may be able to donate a portion of your benefit by naming an organization or organizations of your choosing as a beneficiary, which can be quite easy. For more information on a new life insurance policy for this purpose or augmenting your existing policy to leave a legacy behind in your community, consult your insurance agent or life insurance company.

Charitable giving is “giving without receiving!” By helping organizations that offer assistance to others, you can leave a legacy that will change the lives of many.

Andy Lappan, account executive at Lappan Agency, is a member of the MidMichigan Health Foundation’s Development Council of Alpena’s Planned Gifts Committee.