Life insurance: what's it worth? And who says? Pension Protection Act forces appraisers of donated policies to reassess methods, qualifications.
Journal of Accountancy › Vol. 205 Nbr. 1, January 2008
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Life insurance: what's it worth? And who says? Pension Protection Act forces appraisers of donated policies to reassess methods, qualifications.
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EXECUTIVE SUMMARY * Gifts of life insurance policies to not-for-profit organizations can benefit both the organization and the donor, the latter in the form of an often sizeable income tax deduction. However, under the new requirements of the Pension Protection Act of 2006 (PPA), determining the fair market value of policies will require the help of an appraiser with the appropriate expertise and experience. * Cash-value policies, such as whole life, are valued at fair market value, limited by their cost basis. A paid-up policy is valued at its replacement cost. A policy that is not fully paid up is valued at the lesser of premiums paid or its interpolated terminal reserve amount. * The PPA now requires non-cash charitable contributions to be appraised by a qualified appraiser according to generally ...See the full content of this document
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