A LIFE SETTLEMENT is the sale of an existing life insurance policy for more than the cash surrender value and less than the face amount. This is a great option for policy owners who no longer need or want their existing policies, wish to eliminate future premium burdens, and would like to receive more than they would for surrendering the policy. The funds from a life settlement can be used for anything - including charitable donations.
INCREASE DONATIONS WITH A NEW CONVERSATION
You may have existing or potential new donors who would like to donate but are currently fully allocated. If they have a life insurance policy they no longer need or want, you can start a new conversation today. Through a life settlement, they can exchange the policy for cash and use the funds for other planning purposes, including donating all or a portion of the proceeds to charity.
This option eliminates future premium obligations for a policy they no longer want to fund anyway and allows them to gift without disturbing other assets.
Many donors face liquidity constraints that prevent them from meeting their giving goals. For Cecilia, a life settlement of her donated life insurance policies eliminated her future premium payments and created cash today for the charity she loves. She was then able to see the outcome of her donation while she was still living.
WHAT ABOUT DONATED POLICIES THAT ARE RUNNING OUT OF CASH VALUE?
Even with the best intentions, a policy owner who has donated a life insurance policy to a beloved organization may find themselves in a situation where they can no longer pay the premiums. In these cases, donors are often forced to allow the policy to lapse or surrender it for cash surrender value. Either way, the intended gift is never realized.
What if there was a way to receive more than the cash surrender value and eliminate the need to make future premium payments? Through the life settlement solution, the donor can still honor a sizable gift and see it put to use while they are still living.
Always check for life settlement value before the policy is lapsed or surrendered.
NEED A QUALIFIED APPRAISER FOR FORM 8283?
The IRS requires the use of a qualified appraiser for charitable gifts of donated property with a fair market value of more than $5,000. Form 8283 is a tax form used by individuals, partnerships, and corporations to report noncash charitable contributions when the amount of their deduction for all noncash gifts is more than $5001. This form is used to claim a deduction for a charitable contribution of property or similar items of property, the claimed value of which exceeds $5001.
As an independent qualified appraiser of life insurance policies, we can provide the valuation needed to complete Form 8283.
Complete the form below and one of our team members will reach out to discuss how non-profits use the life settlement solution to enhance donations today!
Ashar Group is a nationally licensed life settlement firm that protects the best interests of policy owners by creating a competitive policy auction to deliver the best value to the seller. Ashar Group does not sell life insurance, manage assets, or purchase policies. We are an independent resource for fiduciary advisors and their clients specializing in life insurance valuation for planning purposes.
