1 Create a New Policy

Many donors choose to create a new life insurance policy with UK as the owner and beneficiary to meet a future philanthropic goal. In most states, you can enter into a new insurance contract with a qualified organization such as UK as the beneficiary and owner of the policy.

It is important to work with a qualified agent who can explain the benefits of permanent insurance, guaranteed death benefits, premium payment schedules, and help you select a policy that best suits your goals. We will work with you and your agent to make sure the selected policy meets UK’s requirements for ownership. UK owns many policies and has a dedicated team in place to carefully manage these assets.

When you name UK as the owner and beneficiary of the policy, the annual premium payments gifted to UK will provide a income tax charitable deduction if you itemize. Many donors choose to couple the gift of life insurance with additional annual gifts so they can enjoy the benefits of their philanthropy today. This type of gift strategy can ensure the students and programs you love are impacted now and into the future.

2 Give an Existing Policy

When you name UK as the owner and beneficiary of an existing policy, you qualify for a federal income tax charitable deduction for the lower of the policy’s fair market value or your cost basis. For paid-up insurance, the fair market value is the cost of replacing the coverage with a new policy issued today based on the current age of the insured at the same face amount as the original policy.

If premiums are still payable on the policy, the fair market value is usually close to the cash surrender value. You may stipulate to us that you wish to no longer make future premium payments, allowing us to access the surrender value immediately for our cash needs.

An alternative, however, may be even more attractive. The policy can remain ours and will stay in force so that someday we receive the original face amount. You pledge to make yearly cash gifts to UK, which we will use to pay the premiums. The gifts are deductible if you itemize, and the policy is thereby kept in force.

3 Retain Ownership of an Existing Policy and Name Us as a Beneficiary

If you would rather retain ownership of a policy for your own financial security or that of others, you have the following options:

• Name us as the sole or partial primary beneficiary of the policy, leaving any balance to your heirs. Because you retain ownership of the policy, you have the right to change the beneficiary at any time in any way you wish.
• Name UK as the contingent beneficiary, so we receive the death benefits only if your primary beneficiary predeceases you.
• Create a separate trust named to receive the death benefits, with terms providing for the financial support for one or more named loved ones for a specific term of years or for life, after which the trust terminates and its assets pass to the University of Kentucky.