A great donation to your alma mater can be life insurance. It allows you to leave a donation to the school and gives you the leverage to make the gift that much bigger. The donor simply pledges the policy to the university and makes the university the beneficiary. When the donor passes away, the death benefit flows into the university’s coffers. Often times the life insurance pledge can be targeted for a specific purpose at the university. For example, the donor may really care about the basketball program and want the death benefit to go to the building of a new stadium.
On top of the fact that you can provide such a nice benefit to your university, it can also provide you with estate and tax planning benefits. Talk to your professionals about this, before you consider such a gift, but there may be tremendous value in it. One of the stategies that is being used at many of the universities to create larger death benefits is through premium financing. The client will not have to come out of pocket for as much of the premium this way and may allow them to purchase a much bigger death benefit. For example a premium for 6 million dollars of life insurance might require a premium of 200,000 a year. If the client can pay a small fraction of the 200,000 and still get the full benefit, then it provides them with a more attractive solution. So they pay out of pocket 20,000 a year rather than 200,000 and still get a benefit of 6 million dollars.