Gifts of Life Insurance Keep Sea Service Support Strong

By SUSAN K. FALLON
Director of the Navy League Foundation

Have you been thinking about making a contribution to the Navy League of the United States? Do you have a life insurance policy, purchased years ago for family protection or business reasons that has outlived its original intent? If so, a gift of life insurance could be a sensible and generous course of action. And it might also allow you to make a more substantial gift than you thought possible.

A life insurance bequest is a powerful gift because it is leveraged, meaning that a small amount of money — the premium — produces a large benefit. Thus, as the donor, you are credited for a much larger gift amount than the actual donation.

There are several ways to use life insurance to make a donation.

For a gift during your lifetime, you can assign irrevocable ownership of a policy to the Navy League, after naming the Navy League as the beneficiary. You also can purchase a new policy with the Navy League as owner and beneficiary. With these options you can receive certain income tax deductions.

For a gift through your estate, you can name the Navy League the beneficiary, or a contingent beneficiary, of a policy. In doing so, you retain lifetime ownership of the policy — keeping the right to cash it in, borrow against it or provide for your family’s security.

A gift of this nature is treated much like a bequest made through your will. Because you retain the ownership of your asset, you will not receive an income tax charitable deduction for this future gift or for your premium payments during your lifetime. The policy’s proceeds will be included in your gross estate, and your estate can take an estate tax charitable deduction.

There are significant benefits to donating life insurance to the Navy League:

Gifts are convenient. On an existing policy, changing the beneficiary is a matter of a simple form that is much less complicated than creating a will, a trust or other forms of giving.
Gifts are economical. In most cases, the size of your gift will be substantially larger than the original costs.
Gifts are flexible. You can formulate a life insurance gift designed in just the amount and type desired.
Gifts are private. Life insurance policies are not public records so privacy is assured, if you so desire.

A life insurance bequest is a relatively simple transaction. The first step is determining the type and size of the gift you would like to make. You will probably want to make this decision in consultation with your estate or tax advisor. Next, complete the necessary forms, which you can obtain either from your insurance agent or directly from the company. Many insurance companies even allow you to fax the paperwork back to them. The change typically becomes effective immediately. Finally, send a copy of your bequest to the Navy League so that we can properly acknowledge and recognize your gift. What could be easier?

An additional benefit of making a gift of this type is that it will entitle you to become a member of the Navy League of the United States’ Legacy Society. This society honors and recognizes the generosity and vision of those who have chosen to leave a legacy through estate or deferred gifts to the Navy League. Legacy Society members receive special recognition in Navy League publications as well as invitations to Society activities and events.

Most importantly, your generosity and patriotism will help to ensure that the Navy League of the United States will continue in its mission to educate our national leaders and the American people, to support the men and women of the sea services, provide assistance to sea service families and support our youth programs.

For assistance in this process or for more information on supporting the Navy League, please contact the Development Office at (800) 356-5760 or development@navyleague.org.