Bequeathing a life insurance policy to a cancer charity or organization

Life insurance, the preferred investment choice among the French, is the ideal savings product for building and/or growing your capital at your own pace.

It is possible to bequeath all or part of the proceeds from a life insurance policy to an association, a foundation, or a public-benefit organization authorized to receive donations and bequests—such as the Gustave Roussy Institute or its Foundation, which are dedicated to medical cancer research—as well as to any other individual or legal entity.

Regardless of your bank, insurer, or other financial advisor, you can name the Gustave Roussy Institute or its Cancer Research Foundation as the beneficiary of your life insurance policy.

Taking out a life insurance policy in favor of the Gustave Roussy Institute or its Foundation is the simplest, most flexible, and most effective way to actively and transparently contribute to the funding of our cancer research.

Life insurance is a savings product in which the insured pays premiums during their lifetime, which are paid to the beneficiary or beneficiaries of their choice after their death.

How can you designate a life insurance policy to an association or organization such as the Gustave Roussy Institute or its Foundation?

The policyholder of a life insurance policy has considerable freedom in choosing their beneficiaries. These can be any individual or legal entity: a family member, a friend, a spouse, a nonprofit organization, a foundation, or a public-benefit organization authorized to receive donations and bequests, such as the Gustave Roussy Institute or its Cancer Research Foundation.

One or more individuals or legal entities may be named in the beneficiary clause of the life insurance policy. The beneficiary clause can take several forms:

• Freely drafted beneficiary clause: The policyholder lists the beneficiaries of their life insurance policy in order, specifying their last name, first name, date and place of birth, as well as their mailing address to facilitate their identification.

If you are transferring a life insurance policy to the Gustave Roussy Institute or Foundation, be sure to include the organization’s name and mailing address: 39 rue Camille Desmoulins, 94800 Villejuif 

• Pre-drafted beneficiary clause in the life insurance policy: This type of clause may take the form of a chain, for example: “The sister; failing that, the spouse at the time of death; failing that, the legal heirs…” or “Association X; failing that, Organization Y; failing that, Foundation Z…”

Regardless of its content, this clause in the life insurance policy is confidential and may be amended at your discretion. A notary can assist you in drafting a beneficiary clause tailored to your family situation and your plans to transfer the proceeds of your life insurance policy to an association or a nonprofit organization.

Life insurance is not included in your estate or in your reserved share. You are therefore free to choose to allocate the amount saved through your life insurance policy to the beneficiary or beneficiaries of your choice. This amount can be distributed freely among the designated beneficiaries. Thus, regardless of your family situation, you can bequeath to the Gustave Roussy Institute or Foundation a percentage of your life insurance policy, a specific amount, or the entire policy.

From a tax perspective, the Institut Gustave Roussy is authorized to receive donations, gifts, bequests, and life insurance proceeds, and its research foundation—recognized as a public-benefit organization—is able to receive funds from your life insurance policy without having to pay transfer taxes to the tax authorities.

If the beneficiary is the spouse or civil union partner of the life insurance policyholder, they are exempt from paying estate taxes.

Any other beneficiary (friend, child, brother, sister, etc.) of the life insurance policy is liable for estate taxes, which may amount to 20% of each beneficiary’s taxable share. These taxes may be partially exempted depending on the age of the deceased at the time the premiums were paid and the amount of the death benefit received by each beneficiary under the life insurance policy.
 

The Four Benefits of Life Insurance:

• A flexible plan that adapts to your lifestyle and budget
• A competitive interest rate and an attractive tax framework
• Funds always available
• Long-term support for Gustave Roussy

The transfer of funds from a life insurance policy is often compared to a bequest because it only takes effect upon the death of the insured or the testator. However, bequests are subject to the rules governing the reserved share, which means that the amount of your estate that you wish to bequeath to a nonprofit or organization is limited to the disposable portion. This available portion decreases in inverse proportion to the number of the testator’s children and is also reduced in favor of the surviving spouse.

Life insurance, as mentioned earlier, is not included in the calculation of your estate, and its distribution is not governed by the rules of the reserved portion. You are free to designate an individual or a legal entity—such as the Gustave Roussy Institute or Foundation—as the sole or joint beneficiary of the funds accumulated under your life insurance policy.