Using “Life” Insurance to Help Philanthropic Organizations Further Their Mission

Life insurance is an important asset in your portfolio. Just like other assets your organization owns, it needs management. To protect the organization and maximize the return on investment, proactive portfolio supervision is key. We respond to the single largest disconnect in the life insurance industry – policyowners expect their life insurance contracts to be proactively managed according to their defined objectives, but advisors lack the quality carrier support for long-term monitoring and management commitments. We utilize a patent pending web based software solution designed specifically for ongoing life insurance policy monitoring. Its purpose is simple – to simplify the complex for a life insurance asset manager by consolidating policy management.

A life settlement is an additional option for unwanted life insurance policies. Traditionally, if a policy was no longer needed, the policyowner would typically let the policy lapse or surrender it for the cash value. A life settlement provides for an additional option whereby a policyowner can sell their existing life insurance policy to a third-party for more than its cash surrender value but less than its death benefit. Our process for maximizing policy values is built around leveraging our deep transaction experience, strategically positioning the policy to potential buyers, building competitive tension, and advocating aggressively to achieve superior results for our clients.

Life insurance policies are a wonderful way to gift assets to a charitable organization. An individual who is already making donations can use those gifts as a premium to leverage up to fund a life insurance policy that will result in a significantly larger benefit amount paid out to the designated charity. For example, an individual could spend $250K in premiums to fund a $5M life insurance policy payable to their favorite philanthropic organization instead of making a $250K cash gift.  

A charitable gift annuity (CGA) allows your donors to make an immediate cash gift to charitable organizations without reducing their spendable income or the inheritance they plan to leave to other members of their family. Charitable gift annuities result in a win for all parties involved – the donor, their family, and of course, the charitable organization. Our team of experts can help examine the various options for mitigating risks and improving portfolio returns.

Many donors acquire annuities but never use the money in their annuity because of the income tax that must be paid on withdrawals. However, if the cash value stays in the annuity, these taxes can be deferred. Instead of liquidating annuity assets while the donor is alive, these assets can be given to charitable organizations tax-free at time of death. Our Legacy Giving review process can help maximize the value your charitable organization receives and work with your team on how to identify specific opportunities with donors who have annuities with large embedded tax gains.