Life Insurance: Things You Must Know

9 Things to Know About Soliciting and Accepting Gifts of Life Insurance Policies

When meeting with donors aged 65 and older, we should make a regular query: “Do you have life insurance policies you no longer rely on? If so, a policy may be a very attractive asset for making a major gift.”
Except in very rare circumstances, term life insurance does not make a good gift. (Namely, those rare circumstances involve the policy being part of a complex estate plan.)
A gift of an existing or paid-up life insurance policy will be valued at approximately the "cash value" in the policy.
Your organization must be a) the owner and b) the beneficiary of the policy in order for the donor to receive a charitable deduction.
A donor that purchases a new policy will receive an annual charitable deduction, provided that they make an annual gift of at least the amount of the insurance policy premium.
Life insurance does not go through the probate process, so the proceeds will be paid shortly after the death of the insured.
Wealth replacement insurance is a concept that a donor should discuss with their life insurance agent.
A gift of life insurance should qualify the donor for your organization's "legacy society".
To move a discussion about a potential gift of life insurance forward, it's important to get a life insurance agent involved as soon as possible.