A donor may make a gift of life insurance, designating the USM Foundation as the owner and beneficiary. The premiums are paid to the USM Foundation by the donor and then the USM Foundation pays the premium to the life insurance company. Premium payments received from the donor are tax-deductible contributions to the donor. Payment of the premiums continues until the donor dies or the policy is surrendered.
Upon initial set-up of this arrangement, the donor should sign either an MOU for an endowment or letter of understanding for an operating account, indicating the distribution of the life insurance proceeds upon their passing.
The USM Foundation Gift Processor oversees the payment process as follows:
- A schedule listing the due dates for the premium payments is maintained.
- Two months prior to the date the premium is due for payment, the Gift Processor prepares a reminder notice of payment due and sends it to the donor.
- The mailing date of the reminder notice is noted on the payment schedule.
- The USM Foundation does not remit premium payments to the life insurance company until the appropriate payment has been received from the donor. The Gift Processor prepares a Disbursement Request Form to process the payment to the insurance company.
- The account is reconciled monthly to reflect any premium payments received from the donor and sent to the insurance carrier.
- The Office of Planned Giving and/or the Development Office at the appropriate USM institution is notified when a problem occurs.