DONATED POLICIES: What is a charitable life settlement?

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.


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.

Meet Edna.
Meet Edna

Like many philanthropic individuals do, Edna donated her life insurance policy to a charitable organization she loved. At the time, the cash value was expected to carry the policy so neither party would have to make a premium payment. However, Edna lived well beyond her financial plan, and the policy was running out of money. The life settlement created liquidity the charity could use for today’s needs, and Edna could witness her donation being put to work.


What about existing or potential new donors who would like to donate but are currently fully allocated? You can start a new conversation today if they have a life insurance policy they no longer need or want. 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.

life settlement qualifications


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.

Learn More About Charitable Life Settlements

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!

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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.

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