While life insurance is often used to support loved ones after someone passes, it can also be a powerful tool for creating lasting change in your community. Donating a life insurance policy to a charity like United Way allows for a significant contribution with relatively small premium payments, offers substantial tax benefits and ensures your legacy lives on. Through United Way’s Hope is in Your Hands campaign, you can take action now that will make a difference for generations to come.
We spoke with Susan O’Brien, Investment Advisor and Wealth Advisor with the Susan O’Brien Group at Richardson Wealth, to learn more about how life insurance donations work. Susan, a wealth management expert with over 25 years of experience and 2024 United Way of Calgary and Area Campaign Co-Chair, shares,
“If someone is thinking of leaving a legacy, a permanent life insurance policy donated to a charity can often provide for a much larger gift than annual donations. This is because the amount paid into a permanent life insurance policy grows tax efficiently over time and the benefit paid out is much larger than the amount paid in.”
The Benefits of Donating Life Insurance
Donating a life insurance policy to charity is a simple yet powerful way to make a lasting difference. One of the biggest advantages is that the value of your donation grows over time. With a permanent life insurance policy, the funds accumulate value as the policy matures, meaning the final payout to charity will be much larger than your original contributions.
When you donate a life insurance policy to United Way, the proceeds are invested in the Tomorrow Fund. This fund is strategically managed to grow over time and address critical community needs.
Here are some key benefits of donating life insurance:
- Immediate tax benefits: If you transfer ownership of the policy to a charity, you receive a tax receipt for the policy’s current cash surrender value and ongoing tax receipts for any future premium payments.
- Estate tax benefits: If you name the charity as the beneficiary but retain ownership, your estate will receive a tax receipt for the full policy amount upon your death, reducing estate taxes.
- Flexible options: Life insurance policies offer flexibility, allowing you to structure your gift in a way that fits your estate planning and philanthropic goals.
Your gift helps create a lasting impact, supporting vulnerable Calgarians for years to come. Your legacy becomes part of a collective action—an effort to inspire people to join in creating lasting change in our city.
How to Donate a Life Insurance Policy
There are several ways you can donate a life insurance policy to United Way:
- Take out a new policy with United Way as the owner. You’ll receive a tax receipt for the policy’s cash value and for any premiums you pay.
- Name United Way of Calgary & Area as the beneficiary of an existing policy. This is a good option if your family no longer needs the policy for financial stability. At the time of your death, the policy proceeds go to United Way, and your estate receives the tax benefits.
- Transfer ownership of an existing policy to United Way. You’ll get a tax receipt for the policy’s current cash value, plus additional tax receipts for any future premium payments.
Susan points out that people often have forgotten policies that they don’t realize can be donated to charity.
“I often find clients have previously taken out life insurance policies and have either forgotten about them, no longer need them or don’t fully understand them. These policies can be an asset in meeting their philanthropic goals and supporting causes that matter to them,” she says.
A Legacy for Calgary
By donating a life insurance policy to United Way, you ensure your legacy supports the causes you care about for years to come. Your gift becomes a part of a community investment that helps build a stronger, more inclusive Calgary-a city where everyone has the opportunity to thrive.
If you’re thinking about donating a life insurance policy, it’s important to discuss your philanthropic plans with your financial advisor. They can help you navigate the tax benefits and ensure your donation aligns with your overall estate planning goals.
If you have questions or want more information on donating a life insurance policy to United Way, please contact our Strategic Giving Specialist at lamia.binzayyad@calgaryunitedway.org.
Hope is in Your hands—by planning your legacy today, you can help create a stronger, more inclusive Calgary where everyone belongs—now and for future generations.
If you would like to name United Way of Calgary & Area as a beneficiary of your insurance policy, please use the information below:
- Legal Name: United Way Calgary and Area
- Charitable Registration Number: 13022 9750 RR0001
- Mailing Address: 600 – 105 12 Avenue SE, Calgary, AB, T2G 1A1