How life settlements can be used for charitable purposes

An often overlooked fact about life settlements is that they have the ability to be used for charitable purposes. Here’s how. 

Suppose an insurance company offers a charitable giving benefit rider. This is a unique feature, available with select universal and variable universal life insurance products, which provides an additional 1 percent death benefit above the base policy face amount payable to a customer’s charity of choice. An insurance company would offer a feature like this to appeal to high net worth individuals shopping for a life insurance policy.

For example, let’s say two different life insurance companies are offering similar policies at similar costs, but Policy B also includes this option to give to a charity at no extra cost to the policy owner. It would make sense for a high net worth individual involved with various charities to be drawn to purchase the policy that includes a charitable giving benefit rider.