When you originally invested in your life insurance policy, you were likely thinking about taking care of others after your lifetime. But you may now find that you and your family no longer need that extra layer of financial protection. You may have even asked yourself, “Should I surrender or cancel my policy?”
If you’re philanthropically inclined, you can contribute your life insurance to a 501(c)(3) public charity, like a donor-advised fund. By contributing your policy during your lifetime, you’re able to use the value of your policy to benefit your favorite causes, while also claiming a current-year income tax deduction (if you itemize) and potentially reducing your estate tax liability. You can also name a charity now to be a beneficiary of your policy after your lifetime, helping to extend your charitable legacy.
