by Hundley Batts, Jr.
HB2 Insurance Services, LLC.

Naming an organization as a term life insurance beneficiary is as easy as writing the organization’s name in your documentation, and if you pass away during the coverage term of the policy, the policy will be paid out to your beneficiary/ies as specified in your policy.

Of course, you’ll have the option to name multiple beneficiaries and contingent beneficiaries, so don’t fret that this is an all-or-nothing proposition.

Keep in mind that there’s no federal or state tax benefit for naming a charity as the beneficiary (whether the primary or secondary beneficiary) of your term life insurance policy. Nor can you write off your premium payments as an income tax deduction.

However, if you donate the proceeds of a permanent life insurance policy, which provides coverage for your entire life, you have more tax strategies available to you. Consult a financial professional or tax advisor before giving a permanent policy to a charity.

Most charitable organizations are more than happy to help with this process — their websites usually have Giving or Donation pages that give helpful info and even samples.   Many organizations also have planned-giving experts who can help discuss various giving options to help you make a gift that is appropriate for your situation, and that will make a lasting impact for a cause you support.

Reach out to your favorite charities in advance

Contacting a charity also helps make sure the gift is planned correctly, like listing the correct legal name and EIN. This also helps if you have specific uses you want the donation to support with the death benefit.

If you’re giving a very large gift or if you’re giving specific assets, it might be a good idea to contact the charity first. “That can help make sure the process is seamless and head off any unexpected complications.

Lastly, it might make things easier on your loved ones later on. Some people do hesitate to contact the charity because they don’t want to draw attention or don’t want to be committed to something that might change in the future. Charities know that situations change, and the $50,000 you planned to donate might turn into $5,000. Working with the charity can make those changes easier by making sure your gift planning is appropriate for you at all stages of life.