Leaving a Charitable Legacy with Life Insurance

December 2025 Newsletter | By: Ian Sachs, CFP®, CLU®, ChFC®, AEP®, CEPA
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At Risk Resource, we help individuals plan not just for their financial futures, but for the legacies they want to leave behind. One of the most powerful ways to create a lasting impact is through planned giving. Whether you’re passionate about philanthropy, education, faith, or the arts, planned gifts ensure your values live well beyond your lifetime.

While there are many ways to leave a legacy, one of the most accessible and impactful options is life insurance. Below are several mainstream giving strategies with an emphasis on how life insurance can serve as a strategic tool in philanthropic planning.

1. Bequests in a Will or Trust

• Leave a percentage, specific dollar amount, or asset to a charitable organization.
• Can reduce estate taxes and provide lasting support for causes you love.

2. Retirement Plan Beneficiary Designation

• IRAs and 401(k)s can be left to a qualified charity generally with no income tax due.
• Tax efficient, since retirement assets are taxed at ordinary income rates when passed to heirs, and since accounts generally have to be distributed over a 10-year period.

3. Gifts of Appreciated Assets

• Donate stocks, mutual funds, or real estate to avoid the taxation of the accumulated gain on the property disposed of.
• Receive a deduction at the fair market value of property but limited to 30% of AGI.

4. Charitable Trusts and Annuities

• Provide income during your lifetime or to heirs (e.g. Charitable Remainder Trusts).
• Remaining assets can go to a charitable cause after a defined term.

Life insurance is one of the most overlooked and underutilized tools for planned giving. It allows individuals to make a significant charitable impact with relatively modest premiums, making it practical for donors at all levels.

1. Donate an Existing Policy

• If you already own an existing policy, you can transfer ownership to a charity.
• You may receive an immediate income tax deduction for the policy’s current value.

2. Fund Premiums with Annual Gifts

• Make annual tax-deductible gifts to a charity to cover premiums on a policy they own.
• Each gift provides current-year tax benefits while funding a future charitable impact.

3. Name a Charity as Beneficiary

• Keep your current policy, but designate a charity as a full or partial beneficiary.
• Preserves more flexibility and control.

4. Create a New Policy for Charity

• Place a new policy with a charitable organization as the owner and beneficiary.
• Receive an immediate income tax deduction for your gift.
• Gifts to cover premiums are generally tax-deductible.

• Affordable leverage: Small premiums can result in large charitable gifts.
• Flexible options: Choose whether to give now, later, or over time.
• Tax-smart strategy: Potential income and estate tax benefits.
• Amplifies impact: Especially useful for younger donors or those with limited assets.

Planned giving is more than a financial decision – it’s a reflection of your values and vision for the future. At Risk Resource, we help clients integrate life insurance into their legacy plans with clarity, purpose, and confidence. We work closely with estate planning attorneys and tax professionals to ensure that everything is properly executed.

Let’s talk about how you can leave a lasting legacy through life insurance.