Gifts of Life Insurance and Retirement Plans
Life insurance offers another means of making a gift to Norwich University. You may give a policy that is fully paid up and take a deduction for the present value of the policy (as determined for tax purposes), or you can purchase a new policy and designate Norwich University as the owner and beneficiary.
We would also be happy to further discuss the benefits of gifts of retirement plans and wealth replacement strategies at your convenience.
For more information, please contact Priscilla Gilbert, Director of Planned Giving, at 802.485.2301 or email pgilbert@norwich.edu.
Gifts of Life Insurance
A gift of life insurance is an attractive option for those individuals who no longer need the financial protection of an existing policy.
For many alumni and friends, assigning a life insurance policy to Norwich—or designating the University as beneficiary—is a simple means of making a significant gift to Norwich without diminishing their current assets.
In addition, by transferring ownership of an insurance policy to the University and naming it as a beneficiary, you qualify for an immediate income tax deduction. The amount of the deduction depends on the status of the policy. In the case of a paid-up policy, the charitable deduction generally equals the replacement value of the policy. If the policy is not paid-up, the charitable contribution is approximately equal to the cash surrender value. In either case, the contribution cannot exceed the donor’s basis in the policy.
Many donors who choose to name Norwich as the owner and irrevocable beneficiary of their life insurance policy choose to make their premium payments directly to Norwich. In turn, Norwich pays the life insurance company the annual premium and the donor receives an income tax charitable deduction for the value of the premium. This way, the donor receives a tax deduction in the year the gift is made, for the current cash surrender value of the policy; the donor will receive an additional credit each year for the premium paid to Norwich.
Gifts of Retirement Plans
Retirement plans or Individual Retirement Accounts (IRAs) may be used as a gift vehicle by designating Norwich as the contingent or final beneficiary. Proceeds from retirement plans may be subject to estate, income, and excise taxes. By assigning such benefits to the University, you can remove them from your estate and often realize substantial tax savings.
There is a bill pending in Congress to allow donors to make a Charitable IRA Rollover. This bill would allow donors to gift IRAs to charity if they do not need the income and would like to avoid the income tax liability on required distributions for individuals older than age 70 ½. If this bill passes, donors will receive a significant income tax deduction for the gift. If this gift vehicle is of interest to you, please email Priscilla Gilbert, Director of Planned Giving, at pgilbert@norwich.edu or call 802.485.2301 and we will add you to our mailing list of alumni and friends interested in this legislation.
Wealth Replacement
Some donors who wish to maintain the value of their estate often take out a life insurance policy for the equivalent cash amount of an asset, such as real estate or securities, that are contributed to the University. Using the tax savings from the current gift to Norwich, you can often take out a life insurance policy for the same (or higher) value of the donated asset, and name your spouse or other heirs as beneficiaries. As a result, Norwich is able to put your gift to immediate use. You are able to see the impact of your gift during your lifetime and your heirs are assured of receiving the equivalent cash value of the donated asset.
For more information, please contact Priscilla Gilbert, Director of Planned Giving, at 802.485.2301 or email pgilbert@norwich.edu.
