Charitable Gift Annuity

by Jeff Rose on December 28, 2012

If you’ve just come into a large sum of money then you’re options for what to do with it are many. Some would spend it on items they want, some would spend it to pay off bills, their mortgage, and other debts and still others would donate a hefty portion to a charity. Little do those few know that donating money or property to a charity can benefit them as well. A charitable gift annuity can be just the thing to provide security for you and your family while helping those in need. Imagine doing something good and being rewarded for it, and then being able to enjoy that reward when it matters most.

A charitable gift annuity works much like basic annuities, but is slightly more complicated. It all begins with a donation to whichever charity you want, most have likely worked with charitable gift annuities before and understand the process. In return for the donation, the charity makes payments on an annuity in your place, though you, and possibly a spouse, will still be the beneficiaries. Not only does the charity benefit, but so do you and your family.

Another benefit of a charitable gift annuity is the tax-deferred interest the annuity earns. All annuities earn a tax-deferred interest, but charitable gift annuities have a slightly higher yield. A slightly higher interest may not seem important at first, but that little adds up over time, and when you begin to receive payments from the annuity you might wind up happily surprised to see how much larger it is compared to what it could have been.

Sometimes, the matured annuity is larger than anticipated, and the beneficiary passes on before the entire amount is withdrawn. Another great feature of a charitable gift annuity is that any remaining money left after a beneficiary has passed on, or their spouse if a second beneficiary was stipulated in the agreement, can be given back to the charity. In the end, you could wind up helping a charity not just once, but twice.

Taking a sum of money to secure an annuity is a wise, responsible choice. Taking that same money and using it for a charitable gift annuity is more than just responsible, it’s a worthwhile decision that can help thousands, maybe millions, of people as well as provide a secure, safe nest egg for you and your family.


This post is in support of the Life Insurance Movement.

Human life is uncertain due to some risks and these risks could be natural or accidental. Disability, accident, retirement, fatal illnesses are some of the risks that are linked to human life. When a person gets disabled temporarily or permanently, there is always a loss of income. Therefore buying life insurance cover for you and your family members is very important.

Although human life cannot be valued as it is priceless, for the life insurance a monetary sum is determined based the loss of his income in the coming years. We all need life insurance cover as we may die too soon or may live too long. There are some very important reasons to buy life insurance for your family:

  • To ensure immediate financial support in case of any mishap
  • To finance education and other needs
  • To build a savings plan
  • To ensure extra income and earnings once you are retired
  • To provide for other life style requirements or any financial contingencies

Primarily, those family members who are earning and have other dependent members on them need a life insurance. Even housewives and children, contributing to the family in their own way need life insurance. Children are considered for life insurance for any potential risk to their income in future.

Buying life insurance for your family is very important as you would want the life to go on even in your absence or the absence of any other family member. The family has every right to enjoy a good life style, get a good education and important health care. One can address all those concerns by buying enough life insurances for every family member.

One can in fact make some good savings by having your family cover on the same life insurance policy. There can be usual discounts with increased payments and reduced risks to the insurer. Do some thorough research before considering life insurance. Get some experienced financial advisor who can help you decide on the best policies and covers for your family member. The amount of insurance will depend on your needs, earnings, and what you want it to cover. But it is very essential to buy life insurance for your family.

While you may never be there to make a claim on your life insurance, it can help pay bills, cover funeral costs and other expenses. Although you can get the financial help, one can never replace the loss of a family member.


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