Benefits from using Life Settlements in Planned Giving
Benefits for the fundraising organization:
- Increase donations from existing donors, and from donors who may not have been able to contribute otherwise.
- Collect a lump sum cash settlement today instead of having to wait for the insured’s death to collect gift proceeds.
- Eliminate the financial burden of premium payments to keep policies in force.
- Provide a valuable option to the donor that furthers their tax and estate planning objectives and invites the opportunity for future/additional gifts.
- Improve budget forecasting ability.
Benefits for the donor:
- Flexible new options to make donations.
- Being able to see the benefits of a gift during their lifetime rather than after their death.
- The ability to make a donation to a favorite fundraising organization without depleting cash reserves or losing income-producing assets.
- Getting a tax deduction for the fair market value (selling price) of the life insurance policy instead of only the cash surrender value.
- Eliminating continued premium payments.
- Removing a taxable asset from their estate (if the policy was individually held).
- The ability to use the tax deduction and/or other financial benefits resulting from the life insurance gift to purchase a new policy to maintain coverage for the donor’s beneficiaries.
