Securing the Future: How to Designate a Charity as Your Life Insurance Beneficiary
November 8, 2023
Selecting a beneficiary for a life insurance policy is a vital decision that reflects an individual's desire to plan for the financial well-being of their loved ones or the causes they care about. Failing to designate a beneficiary could inadvertently redirect the funds into your estate, so you must select your beneficiary thoughtfully. For those with philanthropic inclinations, the opportunity to make a lasting impact lies in designating a charity as the beneficiary. Before reviewing the process of selecting a charity as a beneficiary, it's essential to establish a clear understanding of what a beneficiary is in the context of a life insurance policy.
Definition of Life Insurance Beneficiaries
A life insurance beneficiary is a person or entity who receives money from the policy's death benefit. You can designate a revocable or irrevocable beneficiary. If you have a revocable beneficiary, you can change the named person or entity at any time, whereas with irrevocable beneficiaries, you cannot. Beneficiaries typically do not have to report life insurance policies for tax purposes.
Who you choose for your beneficiary is a highly personal decision. It depends on your values, financial circumstances, and relationship with your family.
Before you name a beneficiary, consider your spouse, children, or other family members you may financially support. In addition to your family, think about what you value. For instance, if you have a charity that matters to you, you may also want to name it a beneficiary.
Why Choose a Charity as Your Beneficiary?
To donate to a charity via your life insurance policy, you can make an impact beyond your lifetime. Assuming an insurable interest exists, no one can contest your decision when you name a charity as the beneficiary. If you fear that your family or friends may attempt to intercept the funds or worry that your heirs may feel overlooked, using your life insurance policy can ensure the funds go where you intend.
Additionally, naming the charitable organization as your beneficiary allows your donation to remain private from friends and family if you wish.
How to Navigate the Process
Once you decide you want to name a charity as your beneficiary, it is time to review and update your policy. To review or make changes, you can log into your account or speak directly with an agent or 1891 Home Office customer care representative about the possible changes, including naming a charity as your beneficiary.
You can also take advantage of 1891 Financial Life's charitable giving rider, a rider that you can choose when purchasing a new life insurance policy. The charitable giving rider pays a percentage of the policy's value to a charity of your choice. 1891 Financial Life will also match your charitable donation dollar for dollar, up to $2,500.
To determine the strategy that works best for you, discuss your plans with a financial professional or insurance agent.
Make an Impact With Your Life Insurance Policy
Giving to charity following your death is one way to align your financial legacy with your values. Instead of donating through gifts or your will, you can include a charitable organization as your life insurance beneficiary.
To ensure your money goes to the right place, consider all your options, including what happens to your insurance policy. 1891 Financial Life prides itself on offering comprehensive insurance policies that fit your lifestyle and values. Contact us today to find out more.
About 1891 Financial Life
At 1891 Financial Life, we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. In 2023, 1891 Financial Life was listed by Forbes as one of "The World's Best Life Insurance Companies."
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.