Give Later - Leveraging Annuities with Life Insurance | InFaith Community Foundation

Give Later

Leveraging Annuities with 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 InFaith 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 InFaith, benefiting specific charities selected by the donor or areas of charitable work they are interested in supporting.

How It Works – The Basics
  1. Client annuitizes a current annuity with appreciation over a fixed period;
  2. The tax-free portion of each payment is used to purchase life insurance to benefit the client’s heirs; and
  3. The taxable portion of each payment is used to make gifts (premium payments) to a life contract owned by InFaith (which may offset tax liability).
Step-by-Step: How to Begin Using This Concept with Your Clients
  1. Contact Advanced Consulting Team to get list of members that may benefit from this approach;
  2. Complete a Comprehensive Financial Analysis to determine interest and suitability;
  3. Read Giving Life Insurance through InFaith;
  4. Create a Fund online, or complete Fund Workbook;
  5. InFaith drafts a Fund Agreement, donor signs;
  6. Absolutely assign policy for charity.
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 annual taxable income that exceeds the donor's standard deduction; and
  • 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; and
  • Results in a minimum of two new life insurance sales.
    Resources to Support Your Work
    Benefits to you, the Financial Professional

    InFaith Community Foundation 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.


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