A gift of a life insurance policy, that you no longer need, can be an easy way to provide generous support to Harvard Graduate School of Design.
A gift of life insurance could be right for you if:
- Your life insurance policy is paid up or has substantial cash value.
- You’ve provided for your family and loved ones by other means.
- You would like to make a generous gift to Harvard Graduate School of Design.
Your life insurance may find a new purpose
You may have purchased a life insurance policy years ago when you wanted to protect your family from financial hardship in case of your untimely passing. Now that your children are grown and independent, your mortgage is paid off, and you have accumulated sufficient assets in your estate to pass on to your family, you may no longer need your life insurance policy for its financial protection.
If this is your situation, consider making a gift of your life insurance policy to Harvard Graduate School of Design. Your policy can provide generous support to our mission without affecting your cash flow.
How It Works
Option 1: Give your policy to Harvard Graduate School of Design
When Harvard Graduate School of Design becomes the owner of your policy we can cash it in and use the proceeds. Alternatively, if you continue to pay the premiums, we could maintain the policy until it ends and then receive the full death benefit amount. In addition to the satisfaction of making a generous gift to Harvard Graduate School of Design with no immediate cost, you will receive an immediate income tax charitable deduction for the value of your policy (or the total premiums you have paid, whichever is less) and an additional income tax deduction if you continue to pay premiums.
In order to make your gift, you must assign Harvard Graduate School of Design all ownership rights to your policy and make Harvard Graduate School of Design the irrevocable designated beneficiary of the policy.
The life is the donors, but the charity owns it, and get bene rights.
This can be easily accomplished by completing a simple form from your insurance company. Be sure to identify us as: The President and Fellows of Harvard College, The Harvard Graduate School of Design, 48 Quincy Street, Cambridge, MA 02138, Federal Tax Identification Number: 04-2103580.
Melba Bautista bought a $250,000 life insurance policy on her own life shortly after the birth of the first of her four children. They are now in their 40s and 50s and no longer need the financial protection the policy provides. The cash value of her policy is now over $90,000, and she’s paid a total of $75,000 in premiums over the years.
Melba has enjoyed a relationship of many years with Harvard Graduate School of Design, and would like to make a significant gift, but is reluctant to use her liquid assets. Shelly is delighted to learn that her insurance policy can be put to a new and productive use. She arranges with her insurance agent to donate her policy.
- Melba’s gift will entitle her to an income tax charitable deduction for the lesser of the value of the policy or the total premiums paid, $75,000 in this example.
- She has the satisfaction of making a generous gift to Harvard Graduate School of Design without affecting her current income.
- As the policy owner, Harvard Graduate School of Design can either cash in the policy and have $90,000 to work with immediately or, if Melba continues to pay premiums, hold the policy and receive $250,000 as a legacy gift from Melba.
Option 2: Designate Harvard Graduate School of Design as a beneficiary of your policy
You can designate Harvard Graduate School of Design to receive some or all of your policy’s death benefit but retain ownership of the policy. You will have the satisfaction of making a generous gift to Harvard Graduate School of Design with no immediate cost to you.
This option allows you to change your mind about your gift should circumstances in your life change. Because your gift is revocable, you do not receive an income tax charitable deduction for your gifts, but your estate will receive an estate tax deduction for the amount your policy distributes to us.
It is very easy to designate Harvard Graduate School of Design as a beneficiary of your life insurance policy. Simply contact your insurance agent to make a change in your policy’s beneficiary designation. Be sure to identify us as: The President and Fellows of Harvard College, The Harvard Graduate School of Design, 48 Quincy Street, Cambridge, MA 02138, Federal Tax Identification Number: 04-2103580.
Loans against your policy can create taxable income
If you give a life insurance policy on which you have an outstanding unpaid loan, you may have to declare a portion of the loan as taxable income. Check with your financial advisor; it may be best to pay off the loan prior to making your gift. If you plan to designate Harvard Graduate School of Design as a beneficiary of your policy (Option 2), an unpaid loan against your policy will not affect your tax picture.
Give a paid-up life insurance policy
Sometimes a life insurance policy may be “paid-up” which means it will stay active without any additional premium payments. A paid-up life insurance policy is a valuable asset and makes an excellent gift.
Some states do not allow you to give a life insurance policy to a charity
For your gift of life insurance to be valid, your state of residence must consider a charity to have an “insurable interest” in your policy. Most states do but verify that this is true in your state before you make your gift.