1. Make The Prep the beneficiary of an existing policy: If you have a life insurance policy that you no longer need to support your family, you can name SHP as the beneficiary of the policy, meaning that Seton Hall Prep will receive the policy’s death benefit at the end of your life. While there are no current tax benefits to this approach, the value of the policy will be removed from your estate for federal estate tax purposes.
2. Make The Prep the owner and beneficiary of an existing policy: This means that instead of simply naming Seton Hall Prep as beneficiary of an existing life insurance policy, you transfer full ownership of the policy to SHP. The Prep receives the policy’s death benefit at the end of your life. In addition to removing the value of the policy from your estate for federal estate tax purposes, this approach also provides you with current federal income tax deductions.
3. Help The Prep purchase a new life insurance policy on your life: If you wish to make a substantial future gift to SHP at a relatively low cost to you, another alternative is to consider purchasing a new life insurance policy and name Seton Hall Prep as the policy owner and beneficiary. You then easily arrange to pay the premiums through gifts to The Prep and deduct the premiums from your federal taxes - annual tax deductible gifts! This approach provides you with federal income tax deductions and the policy proceeds are not included in your estate for federal estate tax purposes.