As another year draws to a close and the “giving season” takes centre stage, now may be a good time to think about giving back. Of course, volunteering your time is one great way. Another means to make a difference is by leaving a legacy — not just to family, but also to a cause or charity that matters to you. Consider using your life insurance policy to help make a difference that will last well into the future.
Creating a legacy by using your life insurance has many advantages.
You can still designate a portion of your life insurance to your family. Have the peace of mind of knowing that your loved ones will be protected financially by your life insurance policy. Yet at the same time, you can also designate a portion of your estate for charity and build a legacy for many years to come.
Life insurance is a simple way to increase the amount of your annual charitable gift. You may already be giving to a preferred charity each year. Using your life insurance enables you to make a much larger gift to that charity, and make an even bigger difference.
You can save on income tax now, or in the future. When you name a charity as the beneficiary on your policy, the charity receives the insurance proceeds just like a regular beneficiary would – but in this case, the payments are considered a donation. As a result, the amount bequeathed qualifies for a tax credit that can offset the income taxes on your estate, regardless of the amount you choose to bestow. And tax savings are always a good thing.
There’s also another option: you can decide to transfer ownership of your policy to your charity now. In this case, your yearly premiums qualify for a tax credit immediately.
Your financial advisor or accountant can help advise as to which option is most beneficial for you.
Begin by deciding where you would like to build your legacy.
Take a look at what is close to your heart and what would benefit from your gift for years to come. Was there an educational institution that helped shape you? If so, you may want to designate it as your beneficiary. Or is there a medical cause, food program or animal shelter that you regularly support? Whatever you choose, you will be leaving your mark somewhere that really matters to you.
Of course, all of this legacy-building talk assumes that you already have life insurance in place. If you don’t, the time may be right for planning ahead and to purchase a policy. Remember, not only will your tax-free funds be used to help take care of your final expenses, but they will also help make a difference in a cause or charity you feel deeply about, while allowing your name to go on living for many years to come.
Canada Protection Plan offers a wide choice of life insurance plans, including No Medical & Simplified Issue Life Insurance which doesn’t require any doctor’s visits or medical tests. To find out more about all of the plans available to you, speak with your advisor or call Canada Protection Plan at 1-877-851-9090.