Donating Your Life Insurance Policy to Charity
by: Sarah Michaels
A practical way to support your favorite charity is to donate your unwanted life insurance policy. A charitable organization can then decide to sell the life insurance policy on the secondary market through an increasingly popular transaction called senior life settlement.
Traditionally, when a person donates his or her life insurance policy to a charitable organization, the charity is responsible for paying the ongoing premiums. This can become a major financial drain for the organization as well as an additional administrative responsibly. Another concern when receiving a donated life insurance policy is that the charity never knows when the funds will be available.
However, with a life settlements investment, a charity can pursue the sale of a life insurance policy on the secondary market for a price that is more than the cash surrender amount but less than the anticipated death benefit of a plan. The organization can then use the funds for immediate charity projects.
In order to pursue a life settlements investment, a charity must receive the proper forms from a life settlements broker such as Advanced Settlements. The broker will then take the necessary steps to present the case to multiple funding institutions. The highest bid is then presented to the charity. After the charity accepts the price and decides to sell the policy, a change of ownership is completed and the cash is transferred to the charity.
There are many ways to give to your favorite charitable organization and help support a worthy cause. However, consider senior life settlements as an alternative to the traditional methods such as cash, checks or direct deposits. Giving non-cash gifts such as a life insurance policy offers more savings in the long run including a current tax deduction for the amount of the cash value and the reduction in the size of the taxable estate.
About The Author
Sarah Michaels is the General Manager at www.advancedsettlements.com. Advanced Settlements offers life insurance settlement, including senior life insurance settlement services.
