If you have life insurance that you no longer need, giving it to Bentley can be an easy way for you to provide generous current or future support to the university without reducing your cash flow.
A gift of life insurance could be right for you if:
- Your life insurance policy is paid up or has substantial cash value.
- You have no loan outstanding against the policy.
- Your family is well-provided for by other means.
How it works
Option 1: You give your paid-up policy to Bentley
Then, as the policy owner, Bentley would either cash in your policy and use the proceeds right away, or maintain the policy until it ends and then receive its full benefit amount.
Option 2: You keep your policy, and name Bentley as its beneficiary
Then, when your policy ends, Bentley would receive some or all of your policy's full benefit amount, as you have designated.
Your life insurance may have a new purpose to serve
You may have purchased a life insurance policy years ago when you wanted to protect your family from financial hardship in case of your untimely passing. Now that your children are grown and independent, your mortgage is paid off, and you have accumulated sufficient assets in your estate to pass on to your family, you may no longer need your life insurance policy for its financial protection.
If this is your situation, consider making a gift of your life insurance policy to Bentley. The value of your policy can provide generous support to our mission without affecting your cash flow.
Option 1: You can give Bentley your paid-up life insurance policy
A paid-up life insurance policy is a policy that will stay in force without any additional premium payments. A paid-up life insurance policy is a valuable asset and makes an excellent gift.
When you give your paid-up insurance policy to Bentley, we will either cash in the policy immediately and use the proceeds, or maintain the policy until maturity and receive the full benefit amount of the policy. Your benefits would include:
- Income tax savings - Because this kind of gift is irrevocable, you would be eligible for an immediate income tax charitable deduction for the calculated value of your gift at the time you transfer your policy to us, providing tax savings if you itemize your deductions.
- Estate tax savings - The full benefit amount of your policy would not be included in your estate. Therefore, if your estate exceeds the applicable exemption amount, you may save estate tax.
In order to make your gift, please contact us, as acceptance is subject to a number of factors.
Option 2: You can keep your policy and name Bentley its designated beneficiary
Another great way to give Bentley your life insurance policy is to make the university a designated beneficiary of it. When your insurance reaches maturity, we would receive the amount or proportion you designate. You can change your designation at any time, giving you the flexibility to revise your gift for any reason. Your benefits would include:
- Ability to make a change - You retain the right to change your mind about your gift at any time. This is valuable in case circumstances in your life change and you need to put a different beneficiary in place of Bentley.
- Estate tax savings - If you are subject to estate tax, your estate would be eligible for an estate tax deduction for the amount your insurance policy distributes to us.
Note: Because you are able to change your mind about this kind of gift, you do not receive an income tax charitable deduction at the time you create the designation.
It is easy to make Bentley a designated beneficiary of your life insurance policy. Simply contact your insurance agent to make a change on your policy's beneficiary designation form. Be sure to identify us as: Bentley University, 175 Forest Street, Waltham, Middlesex County, Massachusetts, Federal Tax ID Number: 04-1081650.
A few states will not allow you to give life insurance to a charity
For your gift of life insurance to be valid, your state of residence must consider a charity to have an "insurable interest" in your policy. Most states do, but verify that this is true in your state before you make your gift.
Justine bought a $250,000 life insurance policy on her own life shortly after the birth of the first of her four children. Her policy has been paid-up for years and her children, who are now in their 40s and 50s, no longer need the financial protection the policy provides. The cash value of her policy is now over $90,000, and she's paid $75,000 in premiums.
Grant has enjoyed a relationship with Bentley for many years, and would like to honor this relationship with a significant gift. However, she has been reluctant to use her liquid assets to make the gift. When Grant learns that her policy can be put to a new and productive use, she is delighted. She makes arrangements with her insurance agent and Bentley's Office of Gift Planning to donate her policy.
- Justine’s gift will entitle her to an income tax charitable deduction that could save income taxes if she itemizes. The terms of the insurance policy and applicable tax law will determine the size of her deduction. In this example, the likely deduction is $90,000 but Justine would need a qualified independent appraisal to document her deduction.
- Her $250,000 death benefit will not be included in her estate, potentially saving estate tax.
- She has the satisfaction of making a generous gift to Bentley without reducing her income level.
- As the policy owner, Bentley can either cash in the policy and have about $90,000 to use immediately, or hold the policy and receive $250,000 as a legacy gift from Grant.