Gift of a Life Insurance Policy
A gift of life insurance is a thoughtful and affordable way to create a lasting legacy while making a significant future contribution to the Concordia Foundation. Whether you already own a policy or are considering one as part of your estate plan, life insurance can help you make a meaningful charitable gift that may be greater than would otherwise be possible.
There are two common ways to support Concordia Foundation through life insurance, each offering different charitable and tax benefits.
Option 1: Transfer Ownership of Your Current Policy
If you wish to make an immediate charitable gift, you may choose to irrevocably transfer ownership of an existing life insurance policy to Concordia Foundation.
When ownership is transferred:
- The Concordia Foundation becomes the owner and beneficiary of the policy.
- You may receive an official charitable donation receipt for the eligible fair market value of the policy at the time of the transfer, determined in accordance with CRA requirements.
- If the policy’s fair market value exceeds its cash surrender value, an independent actuarial valuation may be required to establish the eligible amount of the donation receipt.
- If future premiums are required, Concordia Foundation, as the policy owner, is responsible for those payments. However, if you choose to continue paying the premiums, you may be eligible to receive charitable donation receipts for your premiums.
- Upon the insured’s death, the insurance proceeds are paid directly to Concordia Foundation. Because a charitable receipt was generally issued when ownership was transferred, no additional donation receipt is issued to the estate for the insurance proceeds.
Option 2: Name Concordia Foundation as the Beneficiary
Another simple option is to retain ownership of your life insurance policy while naming Concordia Foundation as the full or partial beneficiary.
With this approach:
- You continue to own and control the policy throughout your lifetime.
- You may change the beneficiary designation, subject to the terms of your policy.
- Upon your passing, the insurance proceeds are paid directly to Concordia Foundation.
- A charitable donation receipt is generally issued to your estate for the eligible amount of the proceeds received, in accordance with CRA rules. This receipt may help reduce taxes payable on your final tax return or on your estate’s return.
Comparing the Two Options
Transfer Ownership Now
Name Concordia Foundation as Beneficiary
Potential charitable tax receipt during your lifetime.
A charitable tax receipt is generally issued to your estate after your passing.
Concordia Foundation becomes the owner and beneficiary of the policy.
You retain ownership and control of the policy during your lifetime.
You may receive donation receipts for future premiums you continue to pay.
Premiums are generally not eligible for charitable receipts because you remain the policy owner.
Insurance proceeds are paid directly to Concordia Foundation at maturity.
Insurance proceeds are paid directly to Concordia Foundation upon your passing.
Transfer Ownership Now
Potential charitable tax receipt during your lifetime.
Concordia Foundation becomes the owner and beneficiary of the policy
You may receive donation receipts for future premiums you continue to pay.
Insurance proceeds are paid directly to Concordia Foundation at maturity.
Name Concordia Foundation as Beneficiary
A charitable tax receipt is generally issued to your estate after your passing.
You retain ownership and control of the policy during your lifetime.
Premiums are generally not eligible for charitable receipts because you remain the policy owner.
Insurance proceeds are paid directly to Concordia Foundation upon your passing.
Important Tax Considerations
Transferring ownership of a life insurance policy may have tax implications. Depending on the policy, a taxable policy gain may arise if the policy’s cash surrender value exceeds its adjusted cost basis. The eligible amount of any charitable donation receipt is determined under the Income Tax Act and CRA administrative guidance; in some cases, an independent valuation may be required.
Because every policy and every donor’s circumstances are unique, the Concordia Foundation encourages you to consult your financial advisor, insurance professional, accountant, or lawyer to determine the approach that best aligns with your charitable and estate planning goals.
A gift of life insurance is a meaningful way to ensure your values continue to make a difference. With your generosity, you can help provide exceptional, compassionate care and innovative programs that will benefit our community for generations to come.
