After the insured’s lifetime, death proceeds from the second contract go to the donor’s customized charitable fund at the LCF, benefiting specific charities selected by the donor or areas of charitable work they are interested in.
How It Works – The Basics
- Client annuitizes a current annuity over a fixed period.
- The tax-free portion of each payment is used to purchase life insurance to benefit the client’s heirs.
- The taxable portion of each payment is used to make gifts (premium payments) to a charitable life contract owned by the LCF (which may offset tax liability).
Target Audience
- Client(s) age 60 or over.
- Desire to reduce future tax burden.
- Has health insurance, long term care, and survivor needs met.
- Has assets they will never need for income.
- Desire to preserve assets for heirs.
- Owns annuities that will generate at least $5,000 of taxable income per year.
- Has charitable intent.
Tax and Financial Benefits for You and Your Clients
- The client may avoid tax liability on annuity payments.
- The client leverages assets for the benefit of heirs.
- The client fulfills charitable goals.
- Results in a minimum of two new life insurance sales.
Step-by-Step: How to Begin Using This Concept with Your Clients
- Obtain OAT Report to determine members that may benefit from this approach.
- Complete a Comprehensive Financial Analysis to determine interest and suitability.
- Complete Fund Workbook: How to Establish your Charitable Fund. (You will need to read Guide to Charitable Life Insurance.)
Resources to Support Your Work
- LiveMeeting replay of Leveraging Annuities with Life Insurance presented by LCF and Bobby Schneider, CLU, ChFC, PhD, CEO of Delta Consulting Group.
- Sample Case Study
- Fund Workbook: How to Establish your Charitable Fund
- Guide to Charitable Life Insurance
- Ways to Give booklet
You may also order these materials online, using our Request Materials form.
Benefits to You, the Financial Representative
Helping your clients give through the LCF not only simplifies your work, you’re also compensated for your efforts. Charitable gifts that come to the LCF through the work of Thrivent Financial Representatives are invested in Thrivent investment products and you receive the corresponding compensation from Thrivent.You don’t need any special qualifications to facilitate gifts to the LCF, and we support you with the tools and information necessary to complete your client’s gift.
For more information about this and other giving options available through the LCF, please call 800/365-4172.
