Reinsuring gift annuities (where the charity purchases commercial annuities to match some or all of its annuity payment obligations) can offer the following benefits to a charitable organization operating a gift annuity program, EXCEPT?
1) Reinsurance can exactly match an income stream (from the annuity company) to the charity's obligation to pay annuity checks.
2) Reinsurance removes the charity's legal obligation to make the annuity payments.
3) Reinsurance removes the risk from the charity that the annuitant may live much longer than expected.
4) Reinsurance can be used to cover the risk associated with accepting a few very large gift annuities by allowing the charity to reinsure only those few annuities.
5) Reinsurance prevents the charity from being in the odd circumstance of wishing for the early death of its donor annuitants.