You Can Use a Life Insurance Policy to Create Your Jewish Legacy

Thank you to the hundreds of generous individuals who have decided to support the sustainability of our Southern New Jersey Jewish community through a current or after-lifetime gift.

If you have not done so already-- it's always a good time to make plans to benefit future generations!

Conveniently, there are numerous ways to be philanthropic and create your own Jewish legacy using financial assets.

For example, many donors choose to establish an endowment fund with the Jewish Community Foundation, Inc. during their lifetime by gifting cash or appreciated assets such as stocks or bonds. They then get to enjoy seeing the endowment fund pay out annual income to their favorite charitable cause(s).

In addition to or instead of donating to an endowment fund with a current gift, a donor can leave a gift after their lifetime, and there are many ways to do so, including updating beneficiary designations in an IRA, or, as we will look at today, creating a legacy using life insurance.

Plus, by committing to a legacy gift to benefit any SNJ Jewish organization from your life insurance policy between now and the spring of 2027, you can participate in the Life & Legacy initiative of the Harold Grinspoon Foundation and help your beneficiary organization(s) earn an incentive grant.

Here are the two most common ways that donors create a legacy using life insurance:

1. Designate a charity as a beneficiary of your life insurance payout:

   1. On your life insurance policy's beneficiary designation form, you can indicate how to divide up the proceeds after your lifetime. There is no cost to initiate this change.

   2. You may wish to leave a portion to your loved ones (such as children or grandchildren) and the balance to the JCF to add to an endowment fund that benefits any nonprofit organization you prefer such as the Jewish Federation of Southern New Jersey and its family of agencies or day schools or synagogues.

   3. Important note: If you do add the JCF on your beneficiary designation form and submit it in writing to your life insurance policy provider, please inform the JCF so we can make sure your wishes are fulfilled when the time comes and count your planned gift for Life & Legacy.

2. Transfer the policy:

   1. If you own a life insurance policy and would prefer to transfer it to the JCF directly, the JCF would become owner of the policy and obtain the full death benefit once it's received to go into the endowment fund that you designate.

   2. Note that a policy transfer may offer immediate tax deductions and other benefits, so check with your trusted accounting, financial, or legal advisor for more details as the JCF does not provide advice or guidance in these areas.

Advantages of leaving a legacy via a life insurance policy include:

1. Having the flexibility to easily adjust your beneficiary designations and the percentages that each beneficiary receives (if you own the policy), as needed

2. Providing an outsized gift compared to the amount you pay in premiums to establish the policy

3. Potential tax benefits such as minimizing the size of your estate and subsequent estate taxes, as well income tax deductions if you transfer the policy but continue to pay the premiums to the JCF

Note that there are many forms of life insurance, such as whole life, term life, universal life, etc. and each have their own features and benefits. Please consult with an expert life insurance provider to determine which type of policy may be the right fit for your personal situation.

Questions about creating your Jewish legacy? Please contact JCF Assistant Director Mike Staff at 856-673-2528 today.

Thank you for your consideration of supporting our Jewish community for many decades into the future by leaving a charitable gift in your life insurance policy!