PREMIUM FINANCING FOR CHARITABLE GIVING AND PROVIDING A LEGACY BENEFIT.
You may be able to provide a legacy benefit to the organization of your choice above and beyond your normal charitable giving. Life insurance premium financing may give you the ability to access your excess life insurance capacity to provide a new life insurance policy with the charitable organization of your choice named as the beneficiary which will receive the death benefit proceeds.
By obtaining a new life insurance policy where the premiums are paid by a premium finance company you may be able provide a charitable organization of your choice with a legacy benefit without depleting your current cash flow to make premium payments. If you have an excess of insurance capacity, obtaining a premium financed policy for charitable giving can help you increase your support for the organizations of your choice.
For example, Mr. Jones is a retired business man who wishes to support his alma mater, the Arizona State University, and does so every year with a $10,000 cash donation. Mr. Jones� current net worth is $5,000,000 including cash, securities and real-state and currently owns a $2,000,000 life insurance policy with his wife, Mrs. Jones, as the beneficiary.
Mr. Jones learned of premium financing and decided to use his excess insurance capacity to take out a new life insurance policy with Arizona State University as the beneficiary. Mr. Jones qualified for a new additional $3,000,000 life insurance policy (Current Net Worth � Existing Coverage = New Policy) and received an offer from a premium finance company to pay the premiums. With the new policy issued and the financing secured, Mr. Jones was able to provide his alma mater with the proceeds from the death benefit less the outstanding premium financed loan amount as a legacy benefit without depleting his current cash flow.
There are many premium financing programs available in the marketplace with varying structures and some of those programs are structured in such a way that Mr. Jones was able to take advantage of those opportunities to provide additional support for the organization of his choice by utilizing his excess insurance capacity and having the premiums paid by a premium finance company.
WANT TO KNOW MORE?
If you are looking for more information on premium financing for charitable giving or have any questions, feel free to contact us via our form on our contact page.