4 Questions To Qualify Life Insurance Donations

July 02, 2021

4 Questions

Initiating a discussion with donors about how they can use life insurance as an alternative gift can seem intimidating. Keep this list of questions handy to help navigate the conversation about this potential opportunity and to set expectations for the process.

If you have any questions, contact our team of experts for advice!

1. Do you have life insurance you don’t need anymore? Did you know, this could be used to benefit a charity?

Strategy

Donate the current life insurance policy for tax deduction. Donor could continue premiums for annual tax deduction. Charity may decide to pay the premium or sell the policy for cash.

Eligibility Checklist

  • Donor has life insurance they don’t need
  • Insured over the age of 50 and/or have they experienced a change in health since they bought the policy

Items to Collect

  • Complete Legacy Giving Medical History Questionnaire
  • Complete Legacy Giving Existing Life Insurance Questionnaire
  • Request most recent annual policy statement (donor will likely have this)
  • An inforce policy illustration (a projection of future premiums on the policy, donor likely will not have this)
  • Signed Legacy Giving HIPAA authorizations and physician’s list forms + 3rd party authorization

Next Steps - Timeline 2 weeks

  1. Legacy Giving will review the materials provided and potentially request more
  2. If we have enough to determine this is a policy that works, Legacy Giving will facilitate changing ownership and beneficiary to the charity and become policy agent
  3. Policy will be appraised for value of the donation could be cost basis of the policy or more if policy is sold for cash

 

2. Are you worried about estate taxes? Did you know that you can donate estate taxable assets to charity at death because we do not pay tax and then you buy life insurance which is tax free to make sure your family is taken care of?

Strategy

Donating insurability by giving taxable assets to charity and buying life insurance for family.

Eligibility Checklist

  • Taxable estate (over $11.4 million per person in 2019)

Items to Collect

  • Complete Legacy Giving Medical History Questionnaire
  • Complete Legacy Giving Existing Life Insurance Questionnaire
  • Signed Legacy Giving HIPAA authorizations and physician’s list forms + 3rd party authorization

Next Steps - Timeline 4-10 weeks

  1. Legacy Giving will review material provided and will order donor’s medical records
  2. Once insurability has been determined, Legacy Giving will design a policy owned by the Donor
  3. The donor will have to complete an insurance exam (medical history, physical measurements and blood/urine samples) as well as sign formal application paperwork

 

3. Do you have annuities you don’t need anymore? Did you know, this could be used to benefit charity?

Strategy

Donating annuity proceeds to charity.

Eligibility Checklist

  • Do they currently have an annuity

Items to Collect

  • Request most recent annual annuity statement (likely will have)
  • Complete Legacy Giving Medical History Questionnaire
  • Signed Legacy Giving HIPAA authorizations and physician’s list forms + 3rd party authorization

Next Steps - Timeline 2 weeks

  1. Legacy Giving will review the materials provided and potentially request more
  2. If we have enough to determine this is an annuity that works, Legacy Giving make a recommendation on how to best use or restructure the annuity

 

4. Did you know you have an asset called insurability that you can donate to charity that might not cost you a dime?

Strategy

Donating insurability by allowing a charity to take a policy out on their life. Charity will be the owner and beneficiary of the policy.

Eligibility Checklist

  • Donor age 70 or above
  • Net worth of approximately $1M or more
  • Must have a close, long-standing relationship with charity.

Items to Collect

  • Complete Legacy Giving Medical History Questionnaire
  • Complete Legacy Giving Existing Life Insurance Questionnaire
  • Signed Legacy Giving HIPAA authorizations and physician’s list forms + 3rd party authorization

Next Steps - Timeline 4-10 weeks

  1. Legacy Giving will review material provided and will order donor’s medical records
  2. Once insurability has been determined, Legacy Giving will design a policy owned by and payable to charity
  3. The donor will have to complete an insurance exam (medical history, physical measurements and blood/urine samples) as well as sign formal application paperwork

 

We Make It Easy - Our Process

Legacy Giving makes it easy for a charitable organization to get started with forms, scripts, processes and training. We have a dedicated team that can handle incoming calls and conversations with donors. Legacy Giving, and its subsidiaries, gets paid only when you get paid in the form of contingent compensation. There are no fees to set the program up. Below is our simple three-step process to help your donors accomplish their giving goals.

Legacy Giving Process

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