What is a Life Settlement? An existence Money is the sale of an existing life insurance policy for a lump sum payment of cash that is greater than the money surrender value. Life insurance is property, just like a car, house, bonds and stocks that can be legally sold in accordance with applicable laws. Via a Life Settlement, a policy owner can realize value today from an asset that’s generally thought to have only a benefit when the insured dies.
Just 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 inside a planned giving program. However, in the simplest terms, Charity fundraising the master of a life insurance policy provides the policy to the philanthropic organization that in turn immediately sells the insurance policy for a lump sum of cash through a Life Settlement http://www.giftedphilanthropy.com/london
In order for a policy to be eligible for an existence settlement, it must meet the following criteria http://www.giftedphilanthropy.com/london:
- Insuring an individual over age sixty-five (65) or having a serious illness
- With a face worth of a minimum of $100,000
- Issued over two (2) years back
- Charity fundraising Benefits:
- Creating a donation to his/her favorite Charity fundraising without depleting cash reserves or losing income-producing assets;
- Obtaining a tax deduction for the fair market value (selling price) from the life insurance policy instead of just the cash surrender value;
- Seeing their donation used throughout their lifetime rather than after their death if the organization did not use a Life Settlement;
- Eliminating the advantages of continued premium payments around the policy;
- Removing a taxable asset from their estate when the policy was individually held.
- Organization Benefits:
- Get a donation from a Donor who might not have otherwise been in a position to contribute whatsoever;
- Collect a lump sum of cash today rather than needing to wait for the insured’s death to collect the proceeds;
- Lacking the financial burden of paying premium payments to help keep the insurance policy in effect;
- Providing an invaluable 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 http://www.giftedphilanthropy.com/london.