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Having created and marketed a life insurance program, listened to multitudes of planned gift officers regarding life insurance, and talked with those who desire to be advisors to charities, I believe one thing all charitable organizations should and must do is this:
Create a gift acceptance policy for life insurance and keep it current.
Designed correctly, the Gift Acceptance Policy (GAP) is the greatest safeguard and protection any charitable organization can have. It can serve as the inanimate arbiter when an agent attempts to get into the charity’s endowment program, offer the latest scheme, or try to get the charity to accept a charitably subpar policy.
Here are a few elements which should be in a life insurance GAP:
- Insurance companies the charity will work with
- Insurance agents the charity will work with
- What types of policies the charity will accept
- What interest rates on approved policies will be accepted
- Procedures on how the charity prefers working with the donor and the agent. Most of the time the agent has already talked with the donor and provided an illustration of what the policy will do, but it doesn’t comply with the GAP. When the planned gift officer gets involved, she may feel it is already too late to decline the policy. However, with a GAP, the officer can call the donor, explain the charity’s procedures, explain why the policy is not in the best interest of the donor or the charity, and suggest a meeting with the agent to help create a better policy. This also helps the planned gift officer to build a relationship with the agent and gain an advisor.
These are the basic and key elements I would want in any GAP. If your organization has positive experiences with gifts of life insurance, PPP encourages you to share them in the comments, along with policies and procedures that contribute to your success.
Author: George Willock, Principal at Willock Coaching and Consulting
Looking for more resources in charitable life insurance gifts?
Are you a member of PPP? Access the following additional resources by searching their titles in PPP's Online Community now!
- Charitable Life Insurance Evaluation Guidelines
- Northwestern University Policy and Procedure for the Acceptance and Management of Gifts of Life Insurance
- Evaluating Creative Planned Giving Scenarios Involving Life Insurance Part 1: An Introduction to Life Insurance Products, Eric Abramson (The Journal of Gift Planning 2004)
- Evaluating Creative Planned Giving Scenarios Involving Life Insurance Part 2: Premium Financed Life Insurance, Eric Abramson (The Journal of Gift Planning 2004)
- Life Insurance: Lone Ranger or Black Bart? Bryan Clontz (2011 National Conference on Philanthropic Planning)