Finding The Perfect Life Insurance Policy Donation

June 30, 2021

Spotting Donors

Non-profit organizations are constantly looking for new ways to engage with donors for meaningful gifts. Cash, stocks, bonds, real estate and other liquid assets are the most common gifts. However, friends of your institution may not have the interest, nor the capacity, to part with these resources. In response, Legacy Giving is pioneering a program to help your gift officers ask for alternative gifts that many other charitable organizations simply look past.

Opportunity #1: Donor with Existing Life Insurance Policies

Some donors own life policies that they no longer need. They can donate these policies to your organization and you may be able to sell these policies for cash to benefit your institution. This transaction is called a life settlement, in which institutional buyers purchase a life insurance policy for cash. In a settlement transaction, the policyowner transfers ownership of the policy to the buyer in exchange for an immediate cash payment. The buyer of the policy is now responsible for all future premium payments, and ultimately receives the policy’s full death benefit.

Good Candidates Include:
  • Those age 65 and older with a health change or anyone age 75 and older
  • Those with permanent life insurance or convertible term insurance
  • Those with policies with a death benefit of $250,000 or more
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Opportunity #2: Donors with Annuities

Many donors acquire annuities but never use the money in their annuity because of the income tax that must be paid on withdrawals. However, if the cash value stays in the annuity, these taxes can be deferred. Instead of liquidating annuity assets while the donor is alive, these assets can be given to charitable organizations tax-free at time of death. Legacy Giving's review process can help maximize the value that the charitable organization receives.

Good Candidates Include:
  • Individuals with large embedded tax gains in their annuity.
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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.

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