For 10 years, a client has told Miliana Marten, CFP, AEPP, that she does not need any more insurance. She is single, she tells the 12-year MDRT member from Jakarta, Indonesia, and her coverage is sufficient.

When Marten brought up the concept of buying an insurance policy that names a charity as the beneficiary, however, the client, the finance director of a nonprofit organization, didn’t just jump at the opportunity — she bought a policy larger than any of the policies she has on herself.

“I believe selling is not the transfer of knowledge but the transfer of feeling to the client,” said Marten, who added that the client also invited her to speak to her organization about the planned giving program. “Sometimes we get the objection of, ‘I don’t have enough money,’ but when you discuss insurance with a sense of legacy and leading a meaningful life, people see the value of leaving behind millions to continue helping out even after they are gone.”

Incorporating charitable planning into her practice helped Marten, who previously focused on critical illness insurance for business owners and professionals, reach Top of the Table for the first time. Since August 2020, she has worked with clients on nearly 20 of these policies and purchased one of her own, naming her church as the beneficiary.

Connecting hearts and minds

The enduring benefits of the program are an easy sell, said Derek J. Reed, CFP, CLU, because of their ability to exponentially grow the giving and ensure that donations don’t end upon a person’s death.

“Instead of giving $10,000 a year to a local charity, why not for the next 10 years take that money and turn it into a quarter-million or a half-million dollars?” said the 20-year MDRT member and MDRT Foundation Platinum Knight from Gloucester, Massachusetts, USA. “When we’re gone, there will still be hunger, corruption, sex trafficking, drug abuse and countless other issues needing our support. Donating a life insurance policy pays a tax-free, lump-sum benefit to charities that you love and care about, even when you’re not around to support them.”

Reed, who handles income planning for pre-retirees and retirees, utilizes the MDRT Foundation’s Gift of Life Insurance Program, in which policyholders can name the Foundation as a beneficiary and know that the money will be spread across numerous charities around the world. (Both Reed and his business partner, 32-year MDRT member and MDRT Foundation Excalibur Knight David S. McKechnie, CLU, also own policies themselves.) One client of Reed’s loves to support international organizations but isn’t connected to charities with that kind of scope that the Foundation possesses. With Reed’s help, she bought a $500,000 policy through the MDRT Foundation, with $50,000 going toward the Foundation and $450,000 of the death benefit going to charities the client identified.

“I’ve got charities I’ve always given to,” the client said, “but it would be nice to have a global impact after I’m gone and impact people and organizations I’ve never even heard of.”

The Foundation’s program includes 170 policies owned and benefiting the MDRT Foundation, with death benefits totaling $28 million and $11.5 million unrestricted to the MDRT Foundation.

Reed, whose practice puts 10% of its revenue into a fund for client-sponsored grants, said discussing charitable planning with clients deepens relationships — transferring your role from money manager to a partner in philanthropy, and further connecting the client’s heart and mind in their decision making.

Paying it forward

Adrian P. Baker, Dip PFS, an MDRT Foundation Board of Trustees member, has seen this as well. The 39-year MDRT member from Bristol, England, U.K., bought a policy himself in 2017, and 25 clients have done the same in the years since. “They’d never heard of it before,” said Baker, who has 160 clients in his holistic wealth management practice. “I call it ‘empower the donor.’ For a small amount of money, you can make a large difference.”

If a client feels reluctant to invest in a program where they won’t see the benefits themselves, Baker has a comparison: his ownership of a farm in the U.K. where he has planted 3,500 trees.

“I may not get to see them fully grown, but I can assure you they’re going to benefit someone,” he said. “People do it for their grandchildren, so why not do it for your favorite charity or charities?”

For Reed, understanding the benefits of generosity comes from personal experience. Growing up, he benefited from the Head Start program to help kids from low-income families, and as an adult, he became the organization’s chairman of the board.

“I can’t tell you how rewarding that made me feel and how warm that made my heart to give back to the place that helped me,” he said. “I’ve been the beneficiary of charity and goodwill and feel compelled from a business and family standpoint that I honor that and pay it forward.”

Contact

Adrian Baker adrianpbaker@me.com

Miliana Marten miliana.mdrt@gmail.com

Derek Reed derek@beauportfinancial.com