Making Charitable Gifts Work for All Parties

For wealthy clientele who no longer need insurance or the settlement proceeds, charitable giving is an excellent consideration. As the settlement market grows, so does the pool of donors available to charitable organizations. If the proceeds for a policy are given to a charity, the donor enjoys a tax deduction on the donation. This can result in substantial savings that allow the donor to buy replacement coverage at today’s more favorable rates (given the client is relatively healthy and insurable). Not to mention the donor can enjoy seeing the benefit of his/her donation to their favorite charity while still living!

With the emergence of the Life Settlement marketplace, charities have started to view life insurance policies in a new light. Traditionally, the client named the charity as the beneficiary of a policy and the charity would take over the premium obligation, which could potentially cause financial hardship as the premiums could be more than the charity could afford.  Now, through a Life Settlement, the charity can opt to have the policy sold to receive the funds today as opposed to waiting for the insured’s death.