Life Insurance

LIFE INSURANCE:

Whole Life insurance is one of the most effective and easiest methods to make a large or significant donation to the church without costing the donor a great deal.  There are also significant income tax breaks for the donor while he or she is still alive.

Dr. and Mrs. Raab donated a whole life insurance policy to the American Heart Association around 1990.  They took out a $100,000 whole life policy on the two of them.  For the American Heart Association to collect any money both of them have to die. The American Heart Association was named as the sole beneficiary.  By naming the AHA as the sole beneficiary the premiums paid over approximately the next 7 to 10 years, until the policy was paid up, were 100% tax deductible.  Once the policy was paid up there was no more expense to the couple.

The premiums they paid at the age they took out the policy were not very expensive.  They as a couple had been donating far more than that each year anyway.   If for whatever reason they had had to stop paying the premiums, illness, financial problems etc, the American Heart Association would have had the option of paying the premiums to keep the full benefit of the policy. 

See the link to the right for an article with more information about this type of giving.