Donated Life Insurance Policies

A donated life insurance plan is a generous gift to a charitable organization. However, there are many instances when such a donation can turn into a burden. Whether the charity can no longer pay the high premiums or the policy is about to lapse or surrender, it is time to look into other options to avoid losing such a valuable asset. Life settlements can eliminate these problems and maximize the benefits of a donated life insurance plan.

A life settlement is selling the life insurance policy for a cash amount that is greater than the surrender value but less than the expected death benefit of a policy or certificate. Instead of keeping an unwanted life insurance plan that may cause more trouble in the long run, a charity can pursue a life settlement with the donor’s permission and cooperation to provide medical records. Senior life settlements insurance can offer instant cash which can be applied to charitable causes; it can eliminate premiums and annual reviews on donated policies; and it can negate the need to spend down assets linked to long-term investments.

In order to pursue life settlements investment options, a charity, or the financial advisor representing the charity, must contact a life settlements broker and request the proper forms. The forms need to be filled out and signed by the insured donor of the policy. A life settlement broker will then obtain the physicians’ statements and other vital documents. Once the case is ready, it will be presented to various financial institutions who will bid on the policy. Once the highest offer is accepted, there will be a change of ownership according to the terms of the signed purchase agreement, and the life insurance settlements will be given to the charity. Typically, this process takes three weeks.

By: Sarah Michaels

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Sarah Michaels is a writer who resides in Cleveland, Ohio. Her work has appeared in numerous print and online publications.