Elliot Cotto : Northwestern Mutual - Building a Legacy with Life Insurance : Article: Building a Legacy with Life Insurance

Building a Legacy with Life Insurance

Building your legacy with the gift of life insurance is a practical and affordable way to achieve your philanthropic goals through charitable contributions. You don't need to be wealthy to make a significant and meaningful gift.

The Gift of Life Insurance
When an applicant applies for a permanent life insurance policy on his or her own life, a charity can be named as both the owner and beneficiary of the policy. Since the charity is the owner, the applicant/donor's annual premium qualifies as a charitable gift and may be tax-deductible. At the time of distribution, no complex probate procedures will be required to settle a life insurance claim, and the donor's estate will not be subject to gift or estate taxes on the amount of the death benefit.

For those individuals who may want to maintain control and access to a policy's cash value, but still have the charity receive the insurance proceeds at death, a donor may retain ownership of the policy and simply name the charity as beneficiary. While this may accomplish both objectives, premiums may not qualify as a tax-deductible charitable contribution since the charity does not own the policy. The insurance proceeds will also be included in the estate of the donor/owner, but may qualify for an estate tax charitable deduction.

How it Benefits a Charity
As beneficiary of a life insurance policy, a charity receives proceeds on a tax-free basis upon the donor's death. If the charity is also given ownership of the policy, it will have access to the cash value throughout the donor's lifetime. If the donor needs to discontinue making premium payments at some point, the charity may have the option of making the policy "self supporting". This may be possible if there is sufficient cash value and/or dividends to offset part or all of the out-of-pocket premium costs. Any accumulated policy values may provide a valuable financial resource to the charity, as an emergency fund or as collateral for a loan from another financial institution.

Your Life, Your Legacy
Including a charity as part of your legacy can be very rewarding for you, your family and a charitable organization. Donors can make a substantial and lasting impact with even modest annual gifts and leave a legacy that otherwise may not have been possible.

The Northwestern Mutual Life Insurance Company, Milwaukee, WI.

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Northwestern Mutual Financial Network is the marketing name for the sales and distribution arm of The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM), and its subsidiaries and affiliates. Elliot Cotto is a Representative of Northwestern Mutual Wealth Management Company®, Milwaukee, WI (WMC), a wholly-owned company of NM and limited purpose federal savings bank. WMC is not a broker-dealer or insurance company. All WMC products and services are offered only by properly credentialed Representatives who operate from agency offices of WMC. Representative is an Insurance Agent of NM (life insurance, annuities and disability income insurance), and a Registered Representative of Northwestern Mutual Investment Services, LLC (NMIS), 1511 N West Shore Blvd Ste 500, Tampa, FL 33607-4595, 813-875-2005, a wholly-owned company of NM, registered investment adviser, broker-dealer and member FINRA (www.finra.org) and SIPC (www.sipc.org). Representative may also be an Investment Adviser Representative of NMIS. NM and The Teague Financial Group are not broker-dealers, registered investment advisers or federal savings banks. There may be instances when this agent represents insurance companies in addition to NM or its affiliates.

Investment products are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, NMWMC or its affiliates and are subject to investment risks, including possible loss of the principal amount invested.

The products and services referenced are offered and sold only by appropriately appointed and licensed entities and Network Representatives. Network Representatives and their staff might not represent all entities shown or provide all the services discussed on this Web site. Not all products and services are available in all states.

Elliot Cotto is primarily licensed in Florida and may be licensed in other states.