THE CHARITABLE GIFT ANNUITY

With all the turmoil in the investing markets these days, it seems natural to ask the question: WHAT IS SAFE ANY MORE?

Can you even trust your favorite charity to keep up their end of the bargain � to continue sending you a check for your lifetime?

Like all annuity contracts that guarantee lifetime income, there is a vast amount or regulation that governs what investments can be made. This holds true for charitable annuities as well as commercial annuities. As a matter of fact, if you examine the workings of a gift annuity, you will likely find that an insurance company is in the picture, but behind the scenes.

Since annuities are long term contractual obligations, insurance companies can make long term investments. Government bonds are available that lock in interest rates for over 20 years, enabling companies to know what their funding sources for long term obligations are.

Does that mean that those bonds do not fluctuate in value? No, their value in the marketplace goes up and down every day in the market. However, their value at maturity does not vary, and the interest they pay is not affected by the the market.

The publicity regarding AIG has caused many to question the integrity of all insurance contracts, but further information should clarify the validity of the insurance regulatory system that is working quite well. No AIG annuity contract will be in jeopardy, and the many insurance companies in the AIG portfolio are sound.