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Industry wants to weed out spreading lilacs.(Products)
- Article from:
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National Underwriter Life & Health-Financial ServicesEdition
- Article date:
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July 5, 2004
- Author:
- Thomas, Trevor
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Copyright informationCOPYRIGHT 2004 The National Underwriter Company. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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A NEW LIFE INSURANCE PRODUCT for charitable giving has been quietly sanctioned in a number of states, despite opposition by industry groups that say the product menaces the very concept of life insurance.
The product, called life insurance and life annuities-based certificates, or lilacs, is a twist on the old idea of nonprofit organizations buying policies on key executives and directors. Lilacs are different in that the insurance policy is owned by outside investors, who get the bulk of the proceeds when an insured executive dies.
Typically, the lilac policy is taken out on a number of individuals associated with the nonprofit group. All those insured are wealthy, to ...