Here are three basic ways to make a gift for the Lord’s work through a planning tool called “life insurance.”
Making a Gift with an Outdated/Paid up Policy:
All life insurance policies have beneficiary designations (a simple written statement with the life insurance company stating who the beneficiary(ies) will be upon death). A gift can be made by naming some aspect/group doing the Lord’s work as a beneficiary.
Making a Gift with an Existing Policy:
By naming a charity as the beneficiary and owner of a life insurance policy, you can receive an income tax deduction of the approximate cash value and the future premiums you pay into the policy.
Making a Gift with the Purchase of a New Policy:
Let’s take a look at an example:
Mrs. Martina Lutheran, 50, donates money to purchase a $50,000 life insurance policy. She makes annual cash gifts for approximately 15 years (based on current dividend schedules) to pay off the premium. This major gift doesn’t dilute her estate for her heirs, and the annual cost is reduced by a current tax deduction. The life insurance cash values increase annually. Her commitment to pay the premium to the “dividend offset point” assures a gift of $50,000 for the designated (chosen) Lord’s work ministry(ies) (e.g., local congregation, GPLHS, WELS missions, etc.). At Martina’s death, proceeds are distributed to the chosen areas of the Lord’s work.
For an annual contribution of $2,400 for 15 years, a gift of $50,000 is created to be used for the Lord’s work.
Amount of charitable bequest
Total contribution ($2,400 for 15 years)
Less tax savings at 28 percent
Net cost to fund the $50,000 bequest