Life Settlements & Planned Giving

Life settlements and Planned Giving have only recently been introduced to one another. Until now, patrons wishing to use life insurance as a charitable giving vehicle were limited in their options.

They could sign ownership rights over to the charitable organization. In that case, either the charity or the patron would be required to pay the ongoing premiums to keep the policy in force until the patron passes on. Also, they could surrender the policy for the current cash value and donate that amount.

Now there is a new and exciting alternative. Patrons wishing to donate a life insurance policy (or its cash value) can apply for a life settlement and possibly receive a much higher cash amount to donate. Polices already donated and in possession of the charity may also be sold with the cooperation of the donating patron. This is a requirement as personal medical records must be obtained to help determine the value of the settlement.

Life settlements offer many positive features, such as:

• Eliminating the burden of ongoing premiums
• Providing positive cash flow for current projects
• Allowing the patron to see their gift in action before they pass on
• Obtaining a possible settlement amount that far exceeds current cash value