Introduction
Life insurance policy owners are facing a major issue, with over 90% of policies being canceled, and 88% of all universal life insurance policies purchased never resulting in a claim, according to a study conducted at the Wharton School. At the same time, a new approach is emerging that allows nonprofits to accept life insurance donations, including certain term policies, in a way that can remove the donor’s future premium obligation and provide an immediate charitable benefit. This is possible by treating life insurance as a major gift asset rather than relying solely on traditional planned giving structures.
The Opportunity
Every year, policyholders cancel life insurance policies that could otherwise provide meaningful charitable proceeds. Historically, the value of a donated policy was often limited to the eventual death benefit or the policy’s cash surrender value. However, when life insurance is treated as an asset, a different outcome becomes possible. In certain cases, a policy with a cash surrender value of $30,000 could receive a fair market value offer of $120,000. That difference can benefit both sides: the donor may be able to maximize the value of their charitable contribution, and the nonprofit can receive substantially more funding than it would through a surrender value approach.
Even more surprising to many organizations is that term policies may also qualify in some situations. For example, a high-face-value term policy nearing expiration, where the policyholder does not plan to pay the upcoming premium increase, may still create a meaningful opportunity. In one scenario, a $10 million term policy expiring the following year produced $1,350,000 for charity while allowing the donor to retain $1,000,000. This kind of outcome is possible because life insurance ownership can sometimes be partially donated, allowing the donor to retain a percentage interest in the asset while contributing the remaining portion to a nonprofit. Compared to canceling the policy, a partial donation strategy can create a significantly better result for both the donor and the organization.
The Doro Foundation
Doro Foundation was created to help nonprofits receive and manage these complex asset donations through a clear, guided process. For organizations that do not want to deploy internal resources to administer policy intake, documentation, valuation coordination, and liquidation logistics, Doro Foundation can manage receiving, liquidating, and granting the proceeds.
Through its partnership with LS Hub, a technology-enabled solution designed to support competitive fair market value outcomes, Doro Foundation works to ensure each donation is handled responsibly and with the goal of maximizing value. This approach can also reduce the friction and high-commission structures often associated with traditional channels, helping support stronger outcomes for nonprofits and donors.
In addition to valuation support and process management, Doro Foundation provides nonprofits with tools and materials to help build a scalable donor outreach program. This may include educational resources, training materials, and campaign support that helps nonprofits and their stakeholders understand how life insurance major gifts work and when the strategy may apply. Doro Foundation also collaborates with wealth managers and other professional partners who serve donors, helping expand awareness and increase the potential for major gifts through existing advisor relationships.
Conclusion
The future of life insurance donations is being reshaped by major gift strategies that treat life insurance as an asset rather than only as a traditional planned gift. For nonprofits, this creates a unique opportunity to unlock meaningful funding from policies that might otherwise be canceled with no benefit to the donor’s legacy or the organization’s mission. Doro Foundation is helping make this process faster, simpler, and more manageable, providing nonprofits a practical way to accept and benefit from life insurance major gifts while keeping donor intent and disciplined execution at the center of every transaction.
