How can a client leverage an annuity with a gift of life insurance?
This strategy takes a nonqualified commercial annuity and leverages it through two new life insurance contracts. The first life insurance contract is for the benefit of the client’s heirs. The second contract is owned by Thrivent Charitable Impact & Investing to benefit the donor’s favorite charities.
After the insured’s lifetime, death proceeds from the second contract go to the donor’s customized charitable fund at Thrivent Charitable, benefiting specific charities selected by the donor or areas of charitable work they are interested in supporting.
- The client annuitizes a current annuity with appreciation over a fixed period;
- The tax-free portion of each payment is used to purchase life insurance to benefit the client’s heirs; and
- The taxable portion of each payment is used to make gifts (premium payments) to a life contract owned by Thrivent Charitable (which may offset tax liability).
How to use this concept with your clients
- Contact Advanced Consulting Team to get a list of members that may benefit from this approach;
- Complete a Comprehensive Financial Analysis to determine interest and suitability;
- Create a fund online, or complete the Fund workbook;
- Thrivent Charitable drafts a Fund Agreement, donor signs;
- Absolutely assign the policy for charity.
- 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 annual taxable income that exceeds the donor's standard deduction; and
- Has charitable intent.
- The client may avoid tax liability on annuity payments;
- The client leverages assets for the benefit of heirs;
- The client fulfills charitable goals; and
- Results in a minimum of two new life insurance sales.
Thrivent Charitable will support you with a full range of charitable products and services, and you'll be compensated for your efforts by Thrivent or American Funds.
Connect with us
We make the process easy
Our team of charitable gift planners utilizes deep charitable expertise to expand your clients' options and help meet their giving goals. Our collaborative approach will allow you to maintain your current client relationships while we provide the most relevant advice that aligns with your clients' financial priorities.
From left to right: Cindy Aegerter, Ben Boline, Nikki Johnson, Greg Shamey