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Donation of an Existing Life Insurance Policy

Give generously without affecting your cash flow.

        

Who is this type of giving for?

Anyone with a life insurance policy whose needs have changed and who wishes to give a large gift without using liquid assets.

        

Donor benefits

  • Retain control over your assets while you are alive and reduce your estate’s tax liabilities.
  • Immediate charitable tax receipt for the fair market value of the policy (as determined by an independent actuary) and receipts issued for premiums paid.
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Additional Information

Do you have a life insurance policy but no longer need the protection it affords? You can donate it to the HEC Montréal Foundation and take advantage of the corresponding tax savings.

By transferring an existing policy to the HEC Montréal Foundation and designating it as the irrevocable beneficiary, you will be issued a tax receipt for the fair market value and not just the cash surrender value.

A number of factors go into calculating the fair market value, including the insured capital, the replacement value, your state of health and life expectancy, conversion privileges and other policy terms, such as riders and double indemnity provisions.

This approach is more favourable to donors than calculations based on surrender value alone and, in many cases, results in a larger tax receipt.

Note that this transfer may trigger a taxable gain, based on the difference between the cash surrender value and the adjusted cost basis.

If you must continue paying premiums, you will also be entitled to a donation receipt for the total amount of these premiums.


The HEC Montréal Foundation does not provide financial or legal advice. The examples used here are for illustrative purposes only. Please consult your financial or legal advisor to ensure that the selected donation option takes into account your specific circumstances as well as all applicable legal and tax implications.

Questions about planned giving?

Contact :

Mireille Lafond

Mireille Lafond HEC 1979
Major and Planned Gifts Advisor

mireille-c.lafond@hec.ca
514-340-7735

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hec.ca > HEC Montréal Foundation > How to Give > Planned Giving > Gifts of Life Insurance > Donation of an Existing Life Insurance Policy

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