 |
A Revolutionary Fundraising Opportunity -- Life
Settlements
Amid fundraisers' growing concerns about the current
charitable giving climate, dampened by the erratic stock market
and shaky economy, a new fundraising opportunity has emerged -
Life Settlements.
What is a Life Settlement? A Life Settlement is the sale of an
existing life insurance policy for a lump sum of cash that is
more than the cash surrender value. A life insurance policy is
property, like a car, house, stocks and bonds that can be legally
sold in accordance with applicable laws. Through a Life
Settlement, a policy owner can realize value today from an asset
that is generally thought to only have a benefit when the insured
passes away.
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 in a planned
giving program. However, in its simplest terms, a Donor who owns
a life insurance policy gives the policy to the philanthropic
organization that in turn immediately sells the policy for a lump
sum of cash through a Life Settlement.
In order for a policy to be eligible for a life settlement, it
must meet the following criteria:
- Insuring an individual over age sixty-five (65) or with a
serious illness
- With a face value of at least $100,000
- Issued over two (2) years ago
Donor Benefits:
- Making a donation to his/her favorite philanthropic
organization without depleting cash reserves or losing
income-producing assets;
- Getting a tax deduction for the fair market value (selling
price) of the life insurance policy instead of only the cash
surrender value;
- Being able to see their donation put to use during their
lifetime rather than after their death if the organization did
not utilize a Life Settlement;
- Eliminating the requirement of continued premium payments
on the policy;
- Removing a taxable asset from their estate if the policy
was individually held. Organization Benefits:
- Receive a donation from a Donor who may not have otherwise
been in a position to contribute at all;
- Collect a lump sum of cash today instead of having to wait
for the insured's death to collect the proceeds;
- Not having the financial burden of paying premium payments
to keep the policy in force;
- Providing a valuable 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 How Does a Life
Settlement Work?
Once the Donor is considering gifting a life insurance policy
to the organization, the life insurance policy should be
appraised. Typically, a Life Settlement Broker can determine its
eligibility for a life settlement and will undertake it to obtain
the highest offer for the policy.
The value of a life insurance policy is determined by a number
of factors, including, but not limited to, the age and medical
condition of the insured, type of insurance policy, rating of the
issuing insurance company and amount of premium payments to keep
the life insurance policy in force. Most types of insurance
policies can qualify, including universal, whole life, and
converted term. When a mutually agreed upon price is determined
for the life insurance policy, the organization that now owns the
policy is paid a lump sum in cash, the ownership and beneficiary
rights are transferred to the purchaser. All future premium
payments are the responsibility of the purchaser and upon the
death of the insured, the death benefit is payable to the
purchaser. The cash proceeds from the Life Settlement may be used
by the organization in any way - there are no restrictions
regarding the use of the funds. The money may be invested or
spent on current projects. Because some Life Settlement Brokers
offer fundraising support, it makes sense for organizations to
partner with them for their expertise.
Life Settlement Regulations
As of June, 2003, eighteen (18) states have enacted statutes
addressing the sale of life insurance policies insuring
non-terminally or chronically ill individuals and an additional
seventeen (17) states have laws that only regulate the sale of
life insurance policies insuring terminally or chronically ill
individuals. Fifteen (15) states do not regulate the transaction
at all.
Donated Life Insurance Policies
In addition, most philanthropic organizations currently own
life insurance policies that have been donated in the past. If
there is a need for funds sooner rather than later or if the
premium payments are becoming burdensome, the organization can
utilize Life Settlement transactions to sell those policies for
lump sums of cash and put the money to work right away.
Life Settlements are powerful arrows in the quivers of
professional fundraisers -
- Generating money for their organizations by encouraging
current gifting of life insurance policies
- Turning already donated life insurance policies into
cash
About The Author
The author, Jolene D. Fullerton, practicing attorney for
eighteen (18) years and former Director and Vice President of the
Viatical and Life Settlement Association of America, the
industry's trade association, is General Counsel for a leading
Life Settlement Broker company, First Secured Life, LLC located
at 1926 Victoria Avenue, Fort Myers, FL 33901; Telephone:
877-968-7785, Website: www.firstsecuredlife.com/nonprofit.html
jolene.fullerton@firstsecuredlife.com
MORE RESOURCES:
Father paved way for Street's debutDenver Post, CO - Nov 17, 2008... and Nixon Coming" — on Monday, at the Austin, Texas, offices of The James Street Group, a financial firm that specializes in structured settlements. ... |
Structured-Settlements - Google News
|
|
|
RELATED ARTICLES
Class Action
Lawsuits
First of all, let me say that anyone who has been in any
way hurt or injured by any other party and settled through
a class action lawsuit, disregard this article. I am more
interested in the little frivolous lawsuits that award
pitiful amounts to offended parties who most likely had no
idea they were offended.
What is Structured
Settlement?
Because it is tailor-made for individual cases, the
structure may also include some immediate payment to cover
special damages. The payment is usually made through
purchase of an annuity from a Life Insurance Company.
The Cost of Not Having
Money
The self-esteem factor of not having enough money is
underestimated. You know what I mean don't you? The agony
of financially struggling and the ecstasy of financial
abundance are dramatically different moments in a person's
life.
Structured Settlements -
Should You Sell Yours?
In recent years, it has become more common for victims of
accidental injury who accept a settlement from the at-fault
party to accept a structured settlement instead of a
lump-sum payment. With a structured settlement, the injured
party receives payments over an agreed-upon length of time
- five years, ten years, or even a lifetime, rather than
receiving payment up front in a lump sum.
Surviving High Debt
States
Are you more likely to have more debt according to what
state you live in? In a recent report done by Experian on
the debt averages per state, the answer is yes! The report,
compiled from approximately 3 million consumers nationwide,
shows that the North East states of New Hampshire,
Connecticut and Rhode Island have the highest average
overall debt in the nation of $16,845, $15,314 and $14,643.
The report measures overall debt of a consumer; everything
present on a credit report, including credit cards and
installment debts but excluding mortgage debt.
The Cash Now
Question
If you have ever been in a bind for cash you know the
stress, the weight of not being able to pay your bills. In
these desperate times, desperate measures are often taken.
A Revolutionary
Fundraising Opportunity -- Life Settlements
Amid fundraisers' growing concerns about the current
charitable giving climate, dampened by the erratic stock
market and shaky economy, a new fundraising opportunity has
emerged - Life Settlements.What is a Life Settlement? A
Life Settlement is the sale of an existing life insurance
policy for a lump sum of cash that is more than the cash
surrender value.
Unstructured
Settlement
Me'Lisa Delaney, 43, is brain-injured as a result of a 1984
medical error that caused a stroke during surgery. The
hospital agreed to settle via a structured settlement, as
overseen by a county conservatorship.
Structured Settlement as
an Investment Vehicle
You always hear people talking about the latest investment
vehicle they're using. It's water cooler talk, dinner table
talk, phone talk, it's everywhere talk.
Should You Sell Your
Structured Settlement?
The courts have just awarded you a settlement in the amount
of $1.3 million dollars for injuries you sustained while
using the Widget Corporation's product.
The Target Capital
Structure
Firms can choose whatever mix of debt and equity they
desire to finance their assets, subject to the willingness
of investors to provide such funds. And, as we shall see,
there exist many different mixes of debt and equity, or
capital structures - in some firms, such as Chrysler
Corporation, debt accounts for more than 70 percent of the
financing, while other firms, such as Microsoft, have
little or no debt.
Lucky
Have you ever looked around and wondered how everyone is
buying houses? Are they really doing that much better than
you are? Maybe. Maybe not.
Structured Settlements
Are Like Ants
Ants are powerful creatures. The powerful ant legs are able
to lift 20 times their body weight, and run the equivalent
of a man running as fast as a racehorse.
Options for Lawsuit
Settlement Winners Receiving Periodic Payments
On January 22,2002, President George W. Bush signed into
law a bill that protects individuals who must sell their
structured settlement payments to meet unplanned financial
needs.
Making Backwards
Choices
I was reading this past week about a woman who lost 170 lbs
in 9 months by eating backwards. She had breakfast for
dinner and dinner for breakfast.
What is a Structured
Settlement
A Structured Settlement is an agreement between a personal
injury victim ( a Plaintiff ) and an Insurance company (
the Defendant )to compensate the Plaintiff by the defendant
with long term periodicpayments instead of a single cash
lump sum.Payments can be tailored to each individual
plaintiffs needs, to help meet expenses such as on-going
medical and living expenses, education, children needs
& support etc' The fixed annuity payments are tax-free
to the claimant, a cost-of-living adjustment (COLA) feature
is available, that can help offset the effects of inflation
over time, payments can continue as long as the claimant
lives thus providing him the maximum benefits.
Individual Voluntary
Arrangements. IVA
What is an IVA?There is an alternative to bankruptcy called
an "Individual Voluntary Arrangement" (IVA). This is a
formal arrangement through the county court to pay an
agreed amount off your debts over a shorter period.
Investing in Structured
Settlements
Often some derelict will be awarded some huge amount of
money from a noble company due to a run away jury in a
Kangaroo Court. Since many times the company paying the
money out agrees on a structured over time settlement, the
plaintiff of course is a lowly human and has lots of
desires for riches and he has little if any cranial
capacity to understand the enormous gift the courts have
grated him as our nation turns in to a socialist quagmire
of re-distributing wealth to those who do not deserve it.
What is a Trust and what
are the Benefits?
Trusts are becoming a popular way to structure business and
personal affairs. If you are considering using a trust in
any way, you should be clear on the legal obligations and
the relationships involved.
How To Form a UK Limited
Company
When starting a business, a large number of people go down
the route of forming a limited company or, to give it its
full title, a limited liability company.The alternative for
someone starting up in business on their own is to trade as
a sole-trader.
|
|
