Whole Life Utilizations

[BNTRS]

I suppose if you are really committed to your church or alma mater this would be of great interest.

I see "planned giving" concept advertised in the alumni magazine all the time. My institution (U.Va) has more money than god, yet they still dun me every quarter in a mailing for a handout as well as in the magazine.

It would creep me out to have a total stranger (charity, church, etc.) own a "contract" on my life. I'm not against the concept (or a life settlement or viatical) for those who want it, but it's just not for me. Seems ghoulish. This is a "utilization" I'll leave to others to write.

To reiterate it's about legacy mostly, and caring for some institution to a high degree. People leave their alma-mater or church life insurance money all the time. This strategy is just a process for making the premiums you put into the policy tax deductible.

If you didn't have a really tight relationship with the institution it would be kind of odd, certainly. But, if you wanted to make sure that some future library was named after you, it's a lot less taxing on your finances than ponying up the actual cash.

 

[CFP83]

Another example would be to insure your life naming another institution (alma mater for example) as owner and beneficiary.

As mentioned in my last post, an amazing real life example of how life insurance & the use of this planned-giving strategy has created a great university, look up Oklahoma State University planned-giving and Boone Pickens. Back in the day Pickens and his advisor clan showed literally hundreds of his fellow OSU alumni how life insurance could benefit the university......the university is really reaping the rewards now, and OSU has tens of millions of cash-value on their balance sheet today.

 

[Mr. Bill]

As mentioned in my last post, an amazing real life example of how life insurance & the use of this planned-giving strategy has created a great university, look up Oklahoma State University planned-giving and Boone Pickens. Back in the day Pickens and his advisor clan showed literally hundreds of his fellow OSU alumni how life insurance could benefit the university......the university is really reaping the rewards now, and OSU has tens of millions of cash-value on their balance sheet today.

Not quite, you were aware of this?

Oklahoma State and T. Boone Pickens Sue Over Fund-Raising Plan - NYTimes.com

But really, it is a great concept. Just has to be done properly.

 

[CFP83]

quote from the above article:

"Mr. Pickens was very involved in the Gift of a Lifetime program, according to Lincoln’s legal filings. It said his name appeared on a June 2006 memo titled “Oklahoma State University Foundation Pickens Insurance Strategy,” and on other documents."

This above quote and the corresponding articles I came across a couple years back are the last thing I had read about the OSU gifting program. Also the articles I had read cited that in total there were close to several hundred alumni who had gifted life insurance to OSU.
One other thing that the above article does not mention is that outside of the 27 alumni who participated in this "group planned giving drive", OSU has many other individuals who in the 90's and early 2000's prior put in place over 100 million of life insurance and named OSU the owner and beneficiary. It was my understanding that is was because of the success and and prolifiration of these earlier alumni gifts that the more organized group effort happened in 2007.

As the above linked article also refers to, individuals naming colleges the owner of life insurance works very well and is an effective overall strategy. This deal involving the group of 27 sounds like it has many moving parts, including the use of "premium financing strategies" which, although makes sense in some certain estate-planning and business-planning life insurance cases, is I believe not suitable at all when combined with a planned-giving strategy. Also Sounds like the agents of Lincoln in putting together this deal together may have not dotted all the i's and crossed the t's.

 

[Chuckles21]

As mentioned in my last post, an amazing real life example of how life insurance & the use of this planned-giving strategy has created a great university, look up Oklahoma State University planned-giving and Boone Pickens. Back in the day Pickens and his advisor clan showed literally hundreds of his fellow OSU alumni how life insurance could benefit the university......the university is really reaping the rewards now, and OSU has tens of millions of cash-value on their balance sheet today.

I am interested in hearing more of the details of how this works. From my understanding it is as simple as taking out a policy, making the organization the owner and beneficiary and the insured is the payer. The insured can then right off the premiums as a charitable donation and the university someday gets a tax free gift.

Is there anything more to the equation that I am missing/details that need to be made clear?

 

[Larry Tew]

... making the organization the owner and beneficiary and the insured is the owner.

??? The insured is not the owner. The only thing the insured does after the policy is in force is to pay the premium as a gift to the organization.

 

[Chuckles21]

??? The insured is not the owner. The only thing the insured does after the policy is in force is to pay the premium as a gift to the organization.

Was supposed to say payer... is now fixed.

 

[bill88000]

I was hoping that there were a few more of us but I we will just have to take what we can.

BNTRS, I am curious do you write many policies for younger singles who can afford to put a decent amount away a year in a policy. I've found that if they are doing their 401k and maybe an IRA they really like the idea of a more conservative tax free accessible vehicle. Just seeing how much of this you are doing.

I am looking to offer life insurance as a retirement instrument. I would like to be a fly on the wall, just to pick up some tips and strategies. I have sold annuities, fixed and variable over the past few years but am becoming a believer in life as possibly a the best and simplest.