Insuring A Better World Fund strives to empower charities with valuable opportunities to enhance their impact. Today, we address a unique and often overlooked avenue for charitable giving—life insurance policies. Inspired by the insightful article from our President David Simon published on ThinkAdvisor titled “10 Top Ways to Use Life Insurance in Charitable Giving”, we explore how charities can effectively manage life insurance donations to maximize their benefits.
Life insurance policies can serve as a powerful tool for charitable giving, allowing organizations to receive substantial contributions that may otherwise go untapped. The ThinkAdvisor article outlines various strategies, from designating the charity as a beneficiary to gifting a policy outright. However, once these policies are accepted, it’s essential for charities to have a clear plan in place to maximize these assets for their mission.
Key Steps for Charities:
- Conduct a Policy Review: Begin by thoroughly reviewing the terms and conditions of each life insurance policy received. Understanding the specifics, such as the face value, premiums, and any potential riders, is crucial for effective planning. Insuring A Better World Fund’s leadership are experts in this step. Reach out to us with any questions.
- Assess Financial Implications: Evaluate the financial implications of maintaining the policies. Charities should consider factors such as ongoing premium payments, potential tax implications, and the overall impact on their financial stability. Don’t just file the annual statements. Illustrations projecting policy performance are a must. These projections are readily obtained from the insurance company. Again don’t hesitate to reach out to Insuring A Better World Fund for help. Let us use our 100+ years of combined experience to assist you.
- Engage with Donors or Donor Families: Establish open communication with the donors or their families to express gratitude, understand their intent, and gather any additional information, such as general health changes of the insured that may be pertinent to the management of the policies.
- Explore Policy Options: Depending on the charity’s goals and financial circumstances, explore various options for utilizing the life insurance policies. This could include holding onto the policies, surrendering them for cash value, or donating them to Insuring A Better World Fund where we take care of all the administration and premium payments.
- Consult with Financial and Legal Professionals: Seek advice from financial and legal professionals with expertise in charitable giving and insurance matters. These experts can provide valuable insights and help charities make informed decisions aligned with their mission and financial objectives. Insuring A Better World Fund’s leadership years of experience and expertise in the utilization of life insurance for charitable giving. Call us at 312.819.0790 or email email@example.com with questions on policies you may have.
- Communicate Transparently: Maintain transparency with donors and beneficiaries, about the charity’s decision-making process and the intended use of life insurance proceeds.
- Update Policies as Necessary: If the charity decides to maintain the policies, ensure they are up-to-date. This may involve updating beneficiary designations or adjusting coverage to align with the donors premium tolerance.
- Integrate Policies into Fundraising Efforts: Consider incorporating the life insurance policies into fundraising campaigns or initiatives, showcasing how these unique assets contribute to the charity’s long-term sustainability and impact.
- Educate Staff and Volunteers: Provide training to staff and volunteers on the options of donating life insurance ensuring everyone involved understands the potential benefits associated with these assets. Again Insuring A Better World Fund is here to help.
Life insurance donations can be a transformative resource for charities, offering a sustainable stream of support for their missions. Life insurance is a $21+ TRILLION asset class. Nearly 90% of life insurance policies lapse without paying a death benefit. Last year alone over 265,000 seniors lapsed approximately $200 BILLION of life insurance. How much of that waste did you transform into gifts for your charity? By following these key steps and leveraging the insights from the ThinkAdvisor article, charities can navigate the complexities of managing life insurance policies effectively and ultimately enhance their capacity to make a lasting impact on the communities they serve. If your charity doesn’t have a life insurance expert…GET ONE. Insuring A Better World Fund may be your life insurance expert. There are valuable life insurance policies lapsing every day. If not now, when?