Tuesday, April 17, 2012

Life and Death and Insurance

Ran across an interesting and provocative article the other day, the premise of which is that philanthropic-minded folks may be missing a charitable opportunity sitting right under their noses.

We've discussed Stranger Owned Life Insurance many times here at InsureBlog, generally as it relates to insurable interest and, often, fraud. But as with most things, there's a good side, as well; in this case, it's turning unneeded life insurance policies over to a charity:

"Don wished he could do more to help his son realize his dream of building that [children's ER]. Don is about to let a $4 million term life policy lapse because he and his partner have sold their medical practice and they do not need it anymore. Don is unaware the policy is convertible into a permanent policy ... he is unaware that he has the option of gifting that converted policy into the hospital foundation and contributing tax deductible cash to the charity each year to pay the annual policy premiums and create a $4 million endowment"

One imagines that some home office critter or other will again raise the (bogus) "insurable interest" issue, but maybe not: donating life insurance policies to charity is a time-honored tradition.

Interesting article - Recommended.
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