charitable giving
DESCRIPTION
Did you know that 90% of policy owners let their life insurance policies lapse or surrender them to their insurance companies? Few people are aware of this shocking statistic. In human terms, it means that 9 out of 10 people never benefit from all the premiums they paid over the years.TRANSCRIPT
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• Life Settlement Defined:The sale of an existing policyPurchased by an institutional funderSeller is generally over age 70Settlement is greater than CSV
• The benefit of a Life Settlement:Economically sensible exit strategySource for liquidity in the estate planOpportunity to “reposition” assetsProvides cash for other needsFacilitates charitable giving
Product Overview:
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Types of Policies That Qualify:
• Term (if convertible)
• Whole Life
• Variable Life
• Universal Life
• Survivorship (any type)
• Group (if portable & convertible)
Product Overview:
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Life Settlements & Philanthropy
Three ways that life settlements apply to charities:
1. Liquidity Source for Seniors• Cash proceeds from Life Settlements may be
donated to charity.
2. Optimization Solution for Charities• Charities who own donated policies
on the verge of lapse or surrender can maximize the value of the policies.
3. Deferred Giving Option• Seniors may want to transfer an unwanted policy
to a Charitable Remainder Trust to be later sold through a life settlement.
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Life Settlements & Philanthropy
Survey:
20% of seniors chose a life settlement for the purpose of charitable giving.
(Source: 2006 Agent Media Corp. Survey)
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Reasons Charities Choose a Life SettlementFor Policies That Have Been Donated
Senior donor has lost interest in making giftsto the charity for premium payments.
The charity does not have the financial oradministrative resources to conduct annual policy reviews, or make premium payments.
The policy is in danger of lapsing, and the charitywants to obtain maximum value for it througha life settlement.
The senior and/or the charity want to see theproceeds from the life settlement go toward thedonor’s philanthropic legacy while they are stillliving.
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Life Settlements & Philanthropy
More About Philanthropy:
More than 58% of affluent householdssaid they would give more to charity if theycould see the impact of their gifts.
-- 2006 Bank of America Study
“Giving While Living” – A concept that enablesdonors to see the results of their largesseduring their lifetime.
Life Settlements – enables “Giving While Living”
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Life Settlements & Philanthropy
Estate Planning Scenario :
During a review of the estate plan, 2 things are discovered.
• Senior owns multiple policies, one of which is not longer needed.
• Senior expresses an interest in making a large cash contribution to establish an endowment at an academic institution.
A life settlement could be the solution.