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Life Insurance:
Gifts of life insurance enable a more substantial contribution to the Red Cross than a donor may be able to afford during his or her lifetime. The gift far exceeds the cost of the gift to the donor, and donors simply elect the American Red Cross as a beneficiary of a life insurance policy, or they may assign ownership of the policy to the American Red Cross.
DESIGNATIONS AS BENEFICIARY
The American Red Cross or any of its operating units may be named as a beneficiary of a life insurance policy, a retirement plan, and payable on death accounts.
Life Insurance
Donors may give the American Red Cross:
Paid-up policy
Policy on which a donor is still paying premiums
New policy
Donors may name the American Red Cross as the:
Beneficiary
Secondary
Co-beneficiary
Contingent beneficiary
The American Red Cross must be named as both owner and beneficiary of the policy before the policy will be recorded as a gift. For charitable contribution purposes, the gift will be valued at its cash surrender value upon receipt.
The American Red Cross does not participate in charitable split dollar arrangements.
Insurance policies not paid up must be reviewed and approved by the Gift Planning Unit before acceptance. The donor may be asked to pledge an annual contribution in the amount of the premium for policies not fully paid up. If the donor agrees to pay premiums and is later unable or unwilling to make contributions equal to the premium payments, the Red Cross will determine on a case-by-case basis if the policy should be surrendered.
The American Red Cross will not accept an insurance policy if there is an outstanding loan against the policy. The loan should be paid off prior to transfer.
Gift of Retirement Plan Assets
A donor may make gifts of retirement plan assets to the American Red Cross during the donor’s lifetime, but the donor, in most cases, will have to pay income tax on the amount withdrawn from the retirement plan. Other tax rules may apply, with potential adverse tax consequences. Charitable IRAs may also be an option. The donor should secure expert advice regarding any plans to give retirement assets.
Payable on Death (POD) Accounts
A donor may name a charitable beneficiary on almost any financial account such as checking, savings and certificates of deposits. The donor may indicate that deposits into these accounts are payable on death to the American Red Cross.
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