Home
>
Structured Settlements
>
A Revolutionary Fundraising Opportunity -- Life Settlements

A Revolutionary Fundraising Opportunity -- Life Settlements

Amid fundraisers' growing concerns about the current charitable giving climate, dampened by the erratic stock market and shaky economy, a new fundraising opportunity has emerged ? Life Settlements.

What is a Life Settlement? A Life Settlement is the sale of an existing life insurance policy for a lump sum of cash that is more than the cash surrender value. A life insurance policy is property, like a car, house, stocks and bonds that can be legally sold in accordance with applicable laws. Through a Life Settlement, a policy owner can realize value today from an asset that is generally thought to only have a benefit when the insured passes away.

How can Life Settlements be used in Fundraising? There are many variations and complex estate and tax planning strategies that can be employed when utilizing Life Settlements in a planned giving program. However, in its simplest terms, a Donor who owns a life insurance policy gives the policy to the philanthropic organization that in turn immediately sells the policy for a lump sum of cash through a Life Settlement.

In order for a policy to be eligible for a life settlement, it must meet the following criteria:

Insuring an individual over age sixty-five (65) or with a serious illness
With a face value of at least $100,000
Issued over two (2) years ago

Donor Benefits:

Making a donation to his/her favorite philanthropic 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;

Being able to see their donation put to use during their lifetime rather than after their death if the organization did not utilize a Life Settlement;

Eliminating the requirement of continued premium payments on the policy;

Removing a taxable asset from their estate if the policy was individually held. Organization Benefits:

Receive a donation from a Donor who may not have otherwise been in a position to contribute at all;

Collect a lump sum of cash today instead of having to wait for the insured's death to collect the proceeds;

Not having the financial burden of paying premium payments to keep the policy in force;

Providing a valuable option to the Donor that furthers their tax and estate planning objectives and invites the opportunity for future/additional gifts.

Improved annual budget forecasting ability How Does a Life Settlement Work?

Once the Donor is considering gifting a life insurance policy to the organization, the life insurance policy should be appraised. Typically, a Life Settlement Broker can determine its eligibility for a life settlement and will undertake it to obtain the highest offer for the policy.

The value of a life insurance policy is determined by a number of factors, including, but not limited to, the age and medical condition of the insured, type of insurance policy, rating of the issuing insurance company and amount of premium payments to keep the life insurance policy in force. Most types of insurance policies can qualify, including universal, whole life, and converted term. When a mutually agreed upon price is determined for the life insurance policy, the organization that now owns the policy is paid a lump sum in cash, the ownership and beneficiary rights are transferred to the purchaser. All future premium payments are the responsibility of the purchaser and upon the death of the insured, the death benefit is payable to the purchaser. The cash proceeds from the Life Settlement may be used by the organization in any way ? there are no restrictions regarding the use of the funds. The money may be invested or spent on current projects. Because some Life Settlement Brokers offer fundraising support, it makes sense for organizations to partner with them for their expertise.

Life Settlement Regulations

As of June, 2003, eighteen (18) states have enacted statutes addressing the sale of life insurance policies insuring non-terminally or chronically ill individuals and an additional seventeen (17) states have laws that only regulate the sale of life insurance policies insuring terminally or chronically ill individuals. Fifteen (15) states do not regulate the transaction at all.

Donated Life Insurance Policies

In addition, most philanthropic organizations currently own life insurance policies that have been donated in the past. If there is a need for funds sooner rather than later or if the premium payments are becoming burdensome, the organization can utilize Life Settlement transactions to sell those policies for lump sums of cash and put the money to work right away.

Life Settlements are powerful arrows in the quivers of professional fundraisers ?

Generating money for their organizations by encouraging current gifting of life insurance policies

Turning already donated life insurance policies into cash

About The Author

The author, Jolene D. Fullerton, practicing attorney for eighteen (18) years and former Director and Vice President of the Viatical and Life Settlement Association of America, the industry's trade association, is General Counsel for a leading Life Settlement Broker company, First Secured Life, LLC located at 1926 Victoria Avenue, Fort Myers, FL 33901; Telephone: 877-968-7785, Website: www.firstsecuredlife.com/nonprofit.html

www.firstsecuredlife.com/nonprofit.html

to o hare transportation Riverwoods .. Lockport Chicago limo O’Hare

In The News:

Kurt the CyberGuy walks through steps he recommends immediately taking after getting new electronics — like phones or TVs — as gifts this holiday season.

When speaking becomes physically challenging, you can preserve your unique voice using Apple's Personal Voice and Live Speech technology.

Google Maps is deleting location history soon. Tech expert Kurt “CyberGuy" Knutsson shows you how to back it up before it's gone.

iOS 18.2 lets AirTag owners securely share item locations with trusted individuals. Tech expert Kurt “CyberGuy" Knutsson examines the powerful new feature.

The FBI is warning timeshare owners of a telemarketing scam tied to a Mexican drug cartel. Tech expert Kurt “CyberGuy" Knutsson provides steps to stay safe.

Protecting your home network includes securing your router, just like your phone or laptop. Kurt “CyberGuy" Knutsson reveals six ways to protect your Wi-Fi router from hackers.

Kurt “CyberGuy" Knutsson: ConnectOnCall breach leaks sensitive data of 910,000+ patients.

Rising elder scams: How to recognize them and protect yourself and your loved ones. Tech expert Kurt “CyberGuy" Knutsson helps you outsmart the scammers.

There are common habits and oversights that could leave your financial information vulnerable to cybercriminals, according to Kurt the CyberGuy.

Counting calories just got easier with The Drop, the world's first automated nutrition tracker using advanced computer vision and artificial intelligence.

A virtual private network can help ensure your information remains security and your privacy remains intact. Kurt the CyberGuy explains.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Artificial intelligence-based cameras are giving air defense operators unprecedented capabilities in monitoring and protecting airspace.

Apple's iOS 18.1 Inactivity Reboot automatically reboots your iPhone if it hasn't been used or unlocked for more than three days, providing better data protection.

An inventor designed rooftop solar panels for a Tesla that draws solar energy while the car is parked, adding travel mileage without plugging in.

There are currently no laws governing what artificial intelligence can and cannot do with the information it gathers; here are 10 things to avoid telling AI chatbots to keep yourself safe.

A credit union with over 240,000 members recently revealed it was targeted by cybercriminals, resulting in a data breach that was part of a two-month attack by hackers.

Scammers have become skilled at creating convincing fake websites that can easily fool unsuspecting users. The CyberGuy offers tips to protect yourself.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

CAPTCHAs, which are used by websites to confirm whether users are people or bots, are harmless, but hackers are using them to infect PCs with malware.

Hackers recently leaked personal information of about 500,000 Americans and stole patient medical records that included lab results and insurance details.

The holiday season sees a rise in mobile shopping scams. Tech expert Kurt “CyberGuy" Knutsson helps you learn how to stay safe.

Tech expert Kurt “CyberGuy" Knutsson says a VPN enhances online banking security by encrypting data and protecting privacy.

Beware of these six sneaky holiday scams. Tech expert Kurt “CyberGuy" Knutsson gives you tips to avoid falling victim.

Tech expert Kurt “CyberGuy" Knutsson reveals how to securely back up and factory reset your Android to protect your privacy and data.

A Revolutionary Fundraising Opportunity -- Life Settlements

Structured Settlements