A Gift of Life Insurance

16 October 2023

Dilip Kembhavi, ’74 MEng, ’78 MBA, and his wife Alaka moved to Edmonton in 1972 from a small town in India called Hubli. Dilip completed his undergraduate degree in Hubli and earned a bachelor of engineering in mechanical engineering in 1970.

A few years later, he enrolled as a graduate student at the U of A where he completed a master of engineering and subsequently returned to complete a master of business administration. Following his education, he had a successful career in management consulting before he started his own firm providing manufacturing management systems to manufacturing enterprises around the globe.

Both Dilip and Alaka strongly believe that a good education is very important and instilled this value in their children who both graduated from the U of A in the faculties of Rehabilitation Medicine and Medicine & Dentistry respectively. 

On the advice of their financial planner, they decided to use life insurance as a charitable giving vehicle to the U of A and designated their gift to the faculties of Engineering, Rehabilitation Medicine and Medicine & Dentistry. 

Asher Tward, Head of Estate Planning at TriDelta Financial, says “the one thing that is critically important when legacy planning is having a proper financial plan in place.” He adds that “a lot of people don’t realize how much they can afford to give to charity.” Many of his clients are pleased to learn how they can support charity without impacting their current lifestyle. And while ensuring that their loved ones are taken care of after they are gone. 

“A gift of life insurance multiplies the gift that you could otherwise give,” says Ross Young, CA, CFP, FEA with ICP Planning Ltd. And there are tax benefits. “If the charity owns the policy and is the beneficiary, then the donor gets a tax receipt for the premiums paid.” Alternatively, if the charity is a beneficiary of a policy and not the owner, then there will be a tax receipt towards the donor’s estate.

Insurance company Canada Life has a new one pay policy for charitable giving and Ross says that “Canada Life wants to make it easy to give life insurance because it can be a powerful thing. If you make a one-time donation, an insurance policy will be issued to the charity as a whole life policy and the ultimate payout will grow. The policy pays dividends each year which increases the amount of the ultimate gift.” He adds that the dividends can also be used to fund current charitable needs rather than increasing the size of the insurance payout in the future.