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

shuttle from O'Hare Orland Park .. Lockport Chicago limo O’Hare

In The News:

FireSat is a satellite project designed to detect and track wildfires early, aiming to detect a fire that's the size of a classroom within 20 minutes.

Tech expert Kurt “CyberGuy" Knutsson reports that researchers have uncovered a Chrome vulnerability used in a cyber espionage campaign.

Preserving voicemails securely on Android: Tech expert Kurt “CyberGuy" Knutsson reveals easy methods to keep memories alive forever.

This phishing kit bypasses 2FA via session hijacking and real-time credential theft. Kurt “CyberGuy" Knutsson offers four ways to stay safe from Astaroth phishing attacks.

Tech expert Kurt “CyberGuy" Knutsson discusses Joby Aviation and Virgin Atlantic planning to launch 200-mph U.K. air taxis linking airports and cities.

Fake Apple virus warnings, security alerts and messages are tactics used to prompt you to call a number or click on a malicious link. The CyberGuy explains how to protect your devices.

The combination of artificial intelligence and neuroscience allows a paralyzed man to manipulate a robotic arm by using his brain to imagine movements.

With the help of artificial intelligence, sophisticated fraud techniques emerging today are virtually undetectable to the untrained eye.

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

If you need to free up space on your Mac, consider deleting duplicate photos in your image library. Apple makes it easy to do, and the CyberGuy explains the process.

Microsoft is discontinuing Skype in May after 22 years of service. Kurt the CyberGuy addresses other options for internet-based phone and video service.

Tron 1, a Chinese company's two-legged robot, is versatile and can walk, roll and pivot, even on rough terrain. Tron 1 stands 33 inches tall and weighs 44 pounds.

Hackers are tricking people into installing password-stealing malware by making them press keyboard shortcuts under the pretense of proving they're not bots.

Saving the voices of loved ones can be a comforting way to keep alive memories. Kurt "the CyberGuy" Knutsson explains how to preserve voicemail messages.

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

The FBI warns that some free online document converters load malware onto people's computers, making their private information vulnerable to attack.

Toyota's compact electric FT-Me is designed to tackle challenges of city living while offering an accessible and eco-friendly transportation solution.

Kurt “CyberGuy" Knutsson says 23andMe's bankruptcy raises data privacy fears: Opt out, download and delete data now.

UBTech and Zeekr unite with AI robot swarms to make car manufacturing faster and smarter. Tech expert Kurt “CyberGuy" Knutsson explains how the process works.

Tech expert Kurt “CyberGuy" Knutsson says Apple's Passwords app had a three-month phishing flaw from iOS 18 to 18.2 patch.

Tech expert Kurt “CyberGuy" Knutsson discusses how this super-small electric mini-truck takes a big step toward production.

Artificial intelligence-generated images and videos that use someone’s likeness typically target women without their consent. The CyberGuy unpacks how to protect loved ones.

A humanoid robot developed in China has transformed from a nimble dancer to performing kung fu moves with surprising precision and balance.

To protect memories, documents and personal data, you should back up your information on personal drives, according to Kurt the CyberGuy.

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

A Revolutionary Fundraising Opportunity -- Life Settlements

Structured Settlements