Some consumers use a whole life insurance policy as a way to gift money to their children or posterity. Others may want to do the same when giving money to a charity, one expert writes.
Dr. Michael Sullivan, vice president of the Pennsylvania-based Estate Planners Group, wrote for Businessweek that it's not uncommon for consumers to take out a life insurance policy and list children or grandchildren as beneficiaries. Some arrange to have an Irrevocable Life Insurance Trust set up as the policy's owner and pay premiums to the policy that can eventually be gifted to the beneficiary tax-free.
Such an arrangement can also benefit one's favorite charity, said Sullivan.
"These philanthropists want the joy and recognition of giving cash or appreciated stock annually but have the foresight to recognize the power of amplifying their giving through life insurance," he wrote. "Life insurance can provide the leverage entrepreneurs are looking for to significantly multiply their gifts to family and charity."
A financial planner can provide relevant information for consumers looking to maximize the potential of a whole life insurance policy and turn it into something that benefits a charity.