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Life Insurance Policies Two forms of life insurance are typically donated: paid-up whole and universal life insurance policies, and newly issued whole and universal life insurance policies. A paid-up policy has a cash value that may be used immediately if necessary by the Arch Foundation. Taking out a new whole life or universal life insurance policy is one way to make a significant gift to the University. The policy may be structured such that you only pay premiums for approximately ten years and each year's premium payment is tax-deductible. If you are considering such a life insurance policy, we suggest that you contact Gift & Estate Planning before beginning the insurance policy paperwork. Newly issued whole and universal life insurance policies usually have little or no cash value. Therefore, they provide no benefits until significant cash value builds within the policy or the insured passes away. For all whole and universal life insurance policies, you should name the Arch Foundation for the University of Georgia, Inc. as both owner and beneficiary. Your tax deduction is equal to the lesser of either the replacement cost or the cost basis of the policy. If you pay any further premiums, those payments are also tax-deductible. Payments in the amount of the premium should be paid to the Arch Foundation. The Foundation will then pay the insurance company premiums. Even though term life policies do not provide a charitable income tax deduction, we encourage you to remember the Foundation as a beneficiary of your term policy. If a person simply makes the Arch Foundation a beneficiary of a life insurance policy, no income tax deduction is allowed. However, upon the death of the insured, the policy proceeds going to the Arch Foundation will be an estate tax charitable deduction.
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