Life Insurance Policy
Sometimes people find themselves with life insurance policies they no longer need after the death of a spouse or after children are grown. By contributing such a policy to the Metropolitan Opera, you can make a wonderful gift, reduce taxes that may otherwise be due upon your death, and receive an immediate charitable deduction for the value of the policy.
Gifts of Percentage Interest in a Policy
You might choose to designate the Met to receive only a partial interest (e.g., a percentage) of a life insurance policy.
Gifts of New or Partial-Paid Policies
You may also assign a partially paid policy to the Met and keep the policy active by sending premium payments to the Met. Or you may purchase a new policy and name the Metropolitan Opera as owner and irrevocable beneficiary. All of your payments would be tax deductible if you itemize.
Gifts That Save Capital Gain
Gifts of securities can be used to cover the payments on a new or partially paid life insurance policy, with the Metropolitan Opera named as a beneficiary. By donating securities, capital-gain tax can be eliminated entirely.
The dividends of a whole life insurance policy may be designated to the Metropolitan Opera without reducing the death value of the policy for your beneficiaries. The donor, who remains the owner of the policy, retains the right to borrow against the policy.
Naming the Metropolitan Opera as Beneficiary
Another option is to name the Metropolitan Opera as the primary beneficiary or co-beneficiary of a life insurance policy. You would retain ownership of the policy and have access to the policy’s cash value. Because you retain ownership, no charitable income-tax deduction is allowed at the time of the gift. Although the face value of the policy will be included in your gross estate at your death, your estate will be entitled to an offsetting charitable estate-tax deduction.
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This publication was prepared by Pentera Inc., an Indiana business corporation, which is independent of the Met. Pentera is solely responsible for its content, and the Met disclaims all liability. The information is intended to introduce certain concepts, and we caution you not to rely on it for any legal, tax, or other purpose. You should obtain the advice of your own legal and tax advisors before making any gift.
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