Life Insurance Policies
Life insurance can be an easy and flexible way to make an important gift to PETA. Whether it is an old policy that has outlived its original purpose (such as for a spouse who no longer needs it or a child who is financially independent or to protect a business that no longer exists) or a new policy purchased specifically to benefit PETA, a gift of life insurance can allow you to leave a much larger gift to animals than may have been possible during your lifetime.
There are at least six different ways in which you can structure a gift of life insurance to PETA:
- You can make PETA a beneficiary of an already existing life insurance policy. Upon your passing, the full face value amount of the policy will go to PETA. Although the proceeds from the policy will be included in your gross estate, the full amount received by PETA may be deductible as a charitable deduction. To make PETA a beneficiary of an already existing life insurance policy, you can simply request a beneficiary designation form from your employer or insurance company. Most forms require the following information:
PETA’s full legal name: People for the Ethical Treatment of Animals, Inc.
PETA’s permanent mailing address: P.O. Box 42516, Washington, DC 20015
PETA’s federal tax identification number: 52-1218336
Your relationship to the beneficiary: Charity
- You can make PETA the owner and beneficiary of an already existing paid-up life insurance policy. By doing so, you may be able to deduct an amount equal to the fair market value of the policy or your cost basis, whichever is less. Since PETA becomes the owner of the policy, the proceeds will not be included in your estate for tax purposes.
- You can make PETA the owner and beneficiary of a policy on which you are still paying premiums. You may be able to deduct an amount equal to the approximate cash value of the policy or the policy’s cost basis, whichever is less, in the year in which you make the gift. You may also be able to deduct any future premium payments, and the proceeds will not be included in your estate for tax purposes.
- You can purchase a new policy and make PETA the owner and beneficiary. Because PETA is the owner, you may be able to deduct premium payments as charitable contributions for as long as the premiums are paid. Because PETA is the owner, you may be able to deduct premiums as charitable contributions for as long as the premiums are paid, subject to state limitations. In addition, the proceeds will not be included in your estate for tax purposes.
- If you participate in a group term life insurance policy through your workplace, you can donate your excess coverage to PETA. Many employers provide generous life insurance coverage as a fringe benefit to their employees, but you may not realize that you are required to pay income tax on the cost of coverage over $50,000. However, a special rule excuses this tax if you donate the excess coverage to charity. Excess coverage is an excellent way to make a valuable gift to PETA that won’t cost you a dime in premiums and actually saves you money. To make this gift, simply inform your company’s benefits department.
- Finally, if you travel, you can make PETA the beneficiary of a travel insurance policy that covers your trip.
A common concern that many people raise when considering a charitable gift is that they do not want to deprive their family or loved ones of an adequate estate. However, with some planning, you can create a “wealth replacement plan” that will substitute life insurance for the assets donated to PETA.
Upon making a charitable gift to PETA, either outright or through a charitable remainder trust or other life income plan, you can use the tax deduction and other financial benefits resulting from the gift to purchase a life insurance policy to replace all or part of the assets donated to PETA. When you pass away, the proceeds would then go to your chosen beneficiary or beneficiaries.
Life insurance is a flexible charitable giving tool that can be used to suit your individual financial needs while also substantially supporting PETA’s programs for animals.
As always, we suggest that you consult with your independent financial, tax, or legal advisor for specific help with your particular situation, as the above is intended as an introductory outline only and PETA does not provide financial, tax, or legal advice. But if you would like more information about the various ways that you can benefit PETA, please click here.