Life Insurance


The donation of an existing life insurance policy or the taking out of a new life insurance policy can provide a substantial bequest to the church with little cost, the premiums.  In addition, the individual has the option to claim income tax credits now, during his or her lifetime, or upon death in the final two income tax returns (the terminal return and the return for the preceding taxation year).

Where the Church is the owner and beneficiary of the life insurance policy, the individual will obtain a donation receipt for the value of an existing policy being donated, plus annual donation receipts for the payment of the insurance premiums.

Where the Church is the beneficiary, but not the owner, of a life insurance policy, a donation receipt will be issued for the capital amount, which receipt can be used for income tax credit purposes in the year of death of the insured and the previous taxation year.

The insured cannot change the beneficiary of the policy where the Church is the owner, as well as the beneficiary, but it can change the beneficiary where he or she, as opposed to the Church, is the owner.  In other words, the donor has control of the policy where the Church is the beneficiary, but not the owner of the policy.

In both cases, the Church receives the funds when the insured, the donor, dies.  The life insurance proceeds can be a substantial amount.


A new life insurance policy is taken out.  The church is the beneficiary & owner.  The insured pays the $1,600 annual premium

Annual premium cost: $1,600
Federal & P.E.I tax credits: $689
Net cost to donor of premium: $911

NOTE:  If it was an existing policy with a $10,000 value (cash surrender value), there would also be a donation in the year of transfer for the value

The church is the beneficiary, but not the owner of a $200,000 life insurance policy

Proceeds on death of insured: $200,000
Federal & P.E.I. tax credits – can be in Year of death and previous taxation year: $91,357
Income tax reduction $91,358