In 2016, Americans gave away nearly $390.05 billion dollars to charitable causes.1 The great thing about financial gifts is that they can be an ideal way to bring about positive changes to people and organizations. But did you know that by buying a life insurance policy and naming a charity as your beneficiary you can continue to support the causes that you care about even after you're gone?
According to the National Philanthropic Trust, it is estimated that between $6.6 trillion and $27.4 trillion in charitable bequests will be made between 1998-2052.2 The fact is, many people are choosing to buy life insurance specifically to make charitable donations to causes that they care about.
The process is easy, a simple task of naming the charity as beneficiary when you buy your policy. Even if you already have an existing policy, typically all you need to do to change your beneficiary is to send a written request to your life insurance company asking them to re-name your beneficiary to reflect the charity that you wish to receive the proceeds.
Naming more than one beneficiary/charity
You don't necessarily have to give 100 percent of the policy's proceeds to a single individual or charity. When buying life insurance for the purpose of leaving the benefits to charity, you have the option of naming one or even several beneficiaries. In fact, you can name one or multiple family members along with one or more charities, and apportion the life insurance proceeds on a percentage basis. For example, you could leave 50 percent to a spouse, 30 percent to a sibling, and split the remaining 20 percent between one or more charities.
Privacy and security
Naming a charity as a beneficiary on your life insurance policy has benefits over simply leaving money to an organization in your will. For example, do you wish to keep your gifting intentions hidden from your family or other individuals? Naming a charity as a beneficiary ensures that your transaction remains private.
Gifting a life insurance policy or naming a charity as beneficiary, you can provide the charity of your choice with the financial resources to ensure that their good work will continue.