Guthrie
Insurance
Blog

Can You Help Your Favourite Charity With Your Life Insurance?

There's a non-profit organization that has been important to you for years. The idea of leaving them something in your last will and testament has come to mind, but there's another way that you can benefit that favourite charity. By choosing to designate the charity as the beneficiary for a life insurance policy, you can ensure the money will be in good hands. Here are a couple of different ways to achieve your desired goal.

Adding a Beneficiary to an Existing Life Insurance Plan

Perhaps you already have a life insurance policy in place and would like to change the current beneficiary. Did you know that many insurance plans allow the covered parties to designate multiple beneficiaries? That means you could choose to retain the current beneficiary but add your favourite charity as a second one. When you pass away, the benefits will be split between the two. The agent who helps you with your personal insurance in North York can walk you through the process and ensure everything is set up to your specifications.

Investing in a Second Policy

There's no rule that says you can only have one life insurance policy. Assuming you want to leave your current policy as is, consider obtaining a second one and naming the charity of your choice as the sole beneficiary. Choose from whole life plans or even a term life plan depending on your circumstances. An insurance broker can help you compare the merits of different plans, identify the one that fits in neatly with your purposes, and ensure everything is arranged to your liking.

For example, you may want to ensure your loved ones do not have to deal with any final expenses that you leave behind. One policy provides the funds needed to settle outstanding debts, funeral expenses, and possibly provide a stipend for a surviving spouse to use for general living expenses for a time. That second policy serves as a legacy that the charity of your choice can use for everything from general operations to increasing the budget for a special activity that is sure to make a difference in the lives of quite a few people.

Why Insurance Instead of a Bequest?

You could leave part of your estate to the charity, but that still leaves a tax burden on your estate. One of the nice things about making the charity a beneficiary of a policy is that the funds are not held up as the will is probated and your executor goes about the business of settling the estate. You also simplify that settling since the insurance does not end up being considered part of your estate.

Like car insurance brokers, life insurance brokers can help clients find the right policies for just about any situation. Talk with plans that are particularly suitable in terms of providing support to charities. Any questions you have will be answered before the new policy goes into effect, and you get the benefit of knowing something you care about deeply will still be helping people long after you are gone.

Proud to be associated with