Common use of Charitable Giving Clause in Contracts

Charitable Giving. Life insurance is purchased in favor of a charity or an institution to replace the potential value of future contributions by the donor or purely as a gift. Most situations are reasonable and financially acceptable, but the insurable risk of loss to the institution should be closely related to the potential loss suffered by the charity and the donor’s personal insurance needs should be already taken care of. In order to establish insurable interest the underwriter will request evidence of a past and present affiliation with the institution showing an established pattern of giving or a pledge of future donations which may be outlined in a letter of agreement between the donor and the charity. Our preference is that the insured is the owner of the contract unless it’s a part of a tax advantaged planning situation and face amounts should normally be limited to around 10 times the annual contribution. If the policy is to be owned by the foundation or charity, letter of agreement between the institution and the applicant must be provided outlining the terms of the arrangement and the tax status of the charity or foundation. We will not participate in any arrangements where the source of the premium is a third party with no real ties to the insured or owner.

Charitable Giving. Life insurance is purchased in favor of a charity or an institution to replace the potential value of future contributions by the donor or purely as a giftgift . Most situations are reasonable and financially acceptable, but the insurable risk of loss to the institution should be closely related to the potential loss suffered by the charity and the donor’s personal insurance needs should be already taken care ofof . In order to establish insurable interest the underwriter will request evidence of a past and present affiliation with the institution showing an established pattern of giving or a pledge of future donations which may be outlined in a letter of agreement between the donor and the charitycharity . Our preference is that the insured is the owner of the contract unless it’s a part of a tax advantaged planning situation and face amounts should normally be limited to around 10 times the annual contributioncontribution . If the policy is to be owned by the foundation or charity, letter of agreement between the institution and the applicant must be provided outlining the terms of the arrangement and the tax status of the charity or foundationfoundation . We will not participate in any arrangements where the source of the premium is a third party with no real ties to the insured or ownerowner .