Gifts of Life Insurance

A Gift of Life Insurance can establish an endowment fund to create permanent support for UJA-Federation and generate an income-tax charitable deduction for the donor.

• Establish a significant Endowment Fund, perhaps to perpetuate one's annual campaign gift, at low actual cost.
• Guarantee future support for UJA-Federation.
• Perpetuate one's family name.

A donor may accomplish this by purchasing a life-insurance policy on his or her life, and naming UJA-Federation as the beneficiary. The policy is then contributed to UJA-Federation, with the instruction that the ownership be changed to UJA-Federation and that the net proceeds of the policy be used to establish an Endowment Fund, perhaps to perpetuate one's annual campaign gift. At the death of the insured, the fund is established in his or her name, thereby bringing perpetual honor and memory to the family name.

After the policy is given to UJA-Federation as a gift, UJA-Federation becomes the owner and may elect to make future payments of the premium. The donor makes a charitable gift each year, which UJA-Federation may elect to use to pay the annual premium to keep the policy in force. The donor may claim that contribution as an income-tax charitable deduction, reducing the effective cost of the annual premium from what it would have been had the donor retained ownership of the policy.

Example

A 63-year-old, nonsmoking woman, in good health, purchased a life-insurance policy with a face value of $100,000 and an annual premium of $3,600, naming UJA-Federation as the beneficiary. After paying the first premium, she transferred ownership of the policy to UJA-Federation. Each year, for ten years, she made a tax-deductible gift of $3,600 to UJA-Federation which, in her 40-percent combined tax bracket for federal and local taxes, saved her $1,440 each year. Therefore, her annual gift really cost her only $2,160. Each year, UJA-Federation elected to pay the premium on her policy, keeping it in force. At the end of the ten years, she had spent only $21,600 to make an ultimate gift of $100,000, the value of the policy.

The net proceeds of the policy will be used to establish an Endowment Fund in her husband's name. His name has now been placed on the Endowment Wall at UJA-Federation Headquarters and will be remembered in perpetuity for the good deeds his family has done in his name.