Life Settlements for Charities

Life Settlements Are a Fundraising Tool for Charitable Organizations

With a fluctuating economy and increasingly difficult environment for fund raising, life settlements help charities and not-for-profit organizations maintain stable levels of giving or grant making to their respective causes. A life settlement is the sale of a life insurance policy, which your donors or members can do while they’re living, and provide some or all of the proceeds to your organization.

A life settlement can provide cash when other investments are underperforming or fluctuating. A charity can avoid drawing down on their assets with life settlements. As assets become depleted, the strength of their investment portfolio is negatively compromised. Life settlements provide the cash necessary to stabilize their financial position and maximize the services and help they provide.

Traditionally, estate planning for non-profit organizations would collect on a life insurance policy payout only after the policy holder passes away, but forward-thinking organizations are now working with their donors to sell their life insurance policies while they are alive, so large cash donations can be made today. A life settlement allows a charitable organization immediate access to income and prevents costly annual reviews, premium payments, and recordkeeping.

Call our (866) 600-9550 Ext 12 for more information or use our quick qualifier to see if you are eligible to work with one of your donors to sell their life insurance policy.

How Charitable Organizations Can Benefit from Life Settlements

• Provides cash which can be applied immediately to charitable causes
• Allows charity to forecast income and removes uncertainty in cash flow
• Eliminates premiums, annual reviews, and need for ongoing recordkeeping of donated policies
• May reduce the need to spend down assets tied to long-term investments
• Immediate access to large sums of money for capital projects
• Reallocate unproductive endowments funds to better performing investment vehicles
• Develop stronger relationships with donors through more creative giving programs
• When it may bring donations from donors that might not otherwise donate due to tax benefits

When Should a Charity Consider a Life Settlement?

• If the premium payments and management of premiums is burdensome
• If the policy is in danger of lapsing or being surrendered
• If the insured (donor) would like to see the impact of their donation while still alive
• May reduce the need to spend down assets tied to long-term investments

How the Donor Benefits from a Life Settlement to a Charity

• Provides donor with a tax deduction in the amount of the life settlement when proceeds are donated
• Allows donor to see their contribution immediately benefit a charity
• Use the tax savings to purchase different, and often less expensive, policies