Single Premium Legacy Plan

A unique solution to acquire permanent Life Insurance with a single premium in the most cost-effective and tax-efficient manner.

Case Study

A healthy 72-year-old donor wanted to support her local hospital with a $1 million

legacy gift. She knew that donating Life Insurance is the most cost-effective and tax-efficient way to be generous, when compared to giving with cash, cheque and credit cards.

Using a Single Premium Plan to structure her $1 million gift. The $1 million donated policy was fully paid up and guaranteed with a one-time premium of $420,000. This generated a $420,000 charitable donation receipt, reducing her net cost to $210,000.

Her costs could be reduced even further by donating appreciated securities (stocks,

ETFs, mutual funds, etc.) to the charity that uses the sale proceeds to pay the insurance

premiums. This approach eliminates the capital gains taxes that would be payable if she

sold the securities.

Other Considerations

The gift could also be structured with personal ownership, naming the charity as beneficiary on death to create a $1 million estate gift. This approach results in estate tax savings of $500,000. Note that there would be no charitable receipt during her lifetime in this scenario, only at death. This is also an excellent stand-alone strategy to create a pre-tax equivalent return of 8% to 10% with no market exposure or interest rate risk using non-registered assets.