Life insurance policies as charitable giving sounds strange to begin with. It does not sound strange that such a plan would end in litigation.
A fund-raising entity of Oklahoma State University, Cowboy Athletics, took out $10 million life insurance policies on some of their biggest donors, The New York Times reported.The 27 donors paid the premiums as part of the “Gift of a Lifetime” program. T. Boone Pickens is one of the schools largest donors.
Cowboy Athletics and Pickens have now sued the insurance company.
NYT: Mr. Pickens and Cowboy Athletics, a fund-raising arm of the university, contend that the Lincoln National Life Insurance Company understated the costs of the program, overstated its potential financial benefits and charged the university inflated premiums, among other things.
Lincoln countered in legal filings that Cowboy Athletics had failed to pay the premiums on the policies and that Mr. Pickens, the colourful energy investor, had “wilfully and intentionally interfered” in the matter.
As the articled noted, these types of insurance policies were sold to charities and then bundled and resold as securities, similar the mortgage-backed securities that played a huge pat in the housing crisis.
In the end, this is just a lawsuit over insurance policies, the facts of which rarely get too exciting. But insurance companies are of course in the business of making money. So when both sides are hoping to profit off an eventual death, litigation seems about an inevitable as death.
The New York Times full report is here.
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