IMMEDIATE AND DEFERRED GIFTS--STRATEGY # 3

Immediate and Deferred Major Gifts
Using the EPOCH Program

Scenario: A medium to large charity desires to increase its annual cash flow for immediate operating expenses. It would also like to build up its endowment for future capital needs. It elects to install the EPOCH program developed by the MAF Companies and underwritten by eleven of the largest and strongest life carriers.*

The charity authorizes the EPOCH program and identifies qualified participants.** Each participant applies for a $2,500,000 guaranteed death benefit life policy. All policies are placed in a 27 year Irrevocable Life Insurance Trust (ILIT) with the charity as the irrevocable trust beneficiary. These policies cannot be surrendered, lapsed or sold for settlement.

Major corporate employee pension plans are ready and willing to fund these policies. Each EPOCH plan is funded by the deposit of $165,000,000 from the pension plan into the ILIT. The pension plan will receive the return of all premiums paid plus a ten percent yield.

A fully subscribed EPOCH plan will consist of 400 to 600 policies. Using the most conservative actuarial table available, two deaths are typically projected in year one. The benefit to the charity in that first year would be $4,000,000 (80% of the total death benefit).

The life insurance benefit per policy grows each year. For example after 27 years, the face amount of any remaining policy would have increased from $2,500,000 to $10,000,000. The charity benefits more the longer the participants live.

Over the 27 year period of the trust, the charity would have received a total of over $170,000,000 (an average of $6,300,000 per year) without any financial

payment or legal responsibility. Charities with less than 400 participants will be combined with other similar charities. Death benefits will be shared proportionally.

Summary
A medium to large charity or nonprofit organization, through an insurable gift by associated persons, can create dramatic cash flow without any financial or legal responsibility to the charity or any donor.

*Life carriers that have endorsed EPOCH:
    American General, AXA, Acadia, Aviva, Columbus Life, ING, John Hancock, Pacific Life,     Principal, Prudential, Transamerica
**Qualified participants
    a) Ages 67 to 79
    b) Insurable at standard non-tobacco or better rates
    c) Significant financial connection to the charity (insurable Interest)
    d) $750,000 net worth including real estate or $125,000 annual income.

Strategy #3
 Questions and Answers

What if the nonprofit can't reach 400 participants?
It is expected that a number of plans will be in this situation. Therefore, two or more plans will be combined to reach the mandatory 400 participant minimum. An EPOCH plan will have a maximum of 600 participants. Plan benefits will be proportionately paid according to the number of participants each nonprofit has in relation to the total number in the plan.

How new is the EPOCH program?
EPOCH took the MAF Companies over three years to design and go through all of the due diligence required to properly roll out the plan. It has been on the market for a relatively short time, but has already received a number of approvals.

Is there any risk to the nonprofit?
There is no financial or legal risk to the nonprofit. The nonprofit is merely a beneficiary to an Irrevocable Life Insurance Trust (ILIT).

What if deaths don't occur as projected?
The most conservative actuarial chart is used in EPOCH projections. With a minimum of 400 insured participants, the projected mortality will be very accurate. There will obviously be minor variations from initial projections but one thing is certain: all plan participants will die and leave a legacy to their favorite charity. EPOCH policies cannot be lapsed, surrendered or sold for settlement.

Who does the plan literature preparation, enrollment meetings, taking of applications, scheduling of exams, etc.?
Professional service companies that have been preapproved are ready to provide these services with minimum administration from the nonprofit.

What are the medical requirements for the proposed participants?
A twenty minute paramedical exam, along with blood and urine specimens, is needed for medical approval. These exams can be done at the proposed insured's home, office or at an EPOCH informational meeting

What if a proposed participant is medically rated?
Only proposed insureds who qualify for standard rates or better will qualify for the EPOCH program. It is anticipated that about 70% of potential donors will be approved. All participants can request their medical results. below.

"Interested in learning more about this program? Feel free to post your questions or comments below. Or you may directly email me now." --Karl Ohrman, President

(This document is not an offer to sell life insurance or make representations about your organization’s ability to take advantage of this strategy. It is merely a summary description of a program offered by the MAF Companies and its underwriting insurance companies.)