Donating your life insurance to a registered Canadian charity is a win-win. Not only are you supporting a cause you care about, but you can also enjoy some tax advantages. There are two main ways this can benefit you:
- Donate the payout: When you pass away, the charity receives the full, tax-free death benefit. Your family can also claim a tax credit for a portion of their contribution, which helps to reduce any potential estate taxes.
- Donate the premiums: If you transfer ownership of the policy to the charity while you’re still alive, they’ll issue a tax receipt for a portion of the premiums you pay each year.