Gifts of Insurance

This type of gift is especially of interest to younger donors who want to provide significant benefit but currently lack wealth to make an immediate substantial gift. Whether donors decide to make the Foundation the owner and beneficiary or simply have the proceeds paid to the Foundation as a beneficiary, it is important to know that proceeds pass outside of the estate and therefore will not be subject to probate fees.

Existing Insurance Policy
For existing policies, the donor donates the policy, designating the Thunder Bay Community Foundation as both owner and beneficiary. If the policy is paid up, no further premium payments are required. If the policy requires further premiums, the donor continues to make premium payments. The Foundation issues a charitable receipt for the cash surrender value at the time of the transfer. A further receipt is issued for premiums paid subsequent to transfer. Normally, the donor makes payments directly to the insurance company. In December of each year, the insurance company issues a letter to the foundation specifying premium payments for which the Foundation issues a receipt to the donor.

New Insurance Policy
For new policies, the donor makes arrangements with a life underwriter for a policy designating the community foundation as both owner and beneficiary. The donor clarifies their intent by letter to the foundation regarding designation. The donor makes premium payments on schedule directly to the insurance company. Annually, the Insurance Company informs the foundation of the premiums paid. The Foundation issues a charitable receipt annually to the donor.

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