Case Study: Crowdsourcing vs. Life Insurance

Timothy Rodman • January 12, 2024

Many turn to crowdsourcing as a solution for family emergencies. But what are the implications of planning for your family’s needs using online crowdsourcing vs. life insurance?

OBJECTIVE

To compare a hypothetical outcome of raising $100,000 via a popular crowdsourcing app versus a 10-Year Term Life insurance policy from GBU Life (GBU).

INITIAL DATA GATHERING

Crowdsourcing App 10-Year Term Life
Goal $100,000 $100,000
Taxes Income tax(1) -
Fees 2.9% + $0.30 per donation(2) -
Cost - est. $43.83/month(3)

ADDITIONAL BENEFITS OF GBU LIFE INSURANCE

  • Wellness programs
  • Donation matching
  • Education programs
  • And so much more!

CROWDSOURCING HYPOTHETICAL

Marianne is ready to retire, but she is particularly worried about the first 10 years of this new lifestyle. What if something unforeseen happened and she passed away? Family could always use a popular crowdsourcing app in hopes of raising money4. According to Forbes, less than 12% of crowdsourcing campaigns reach their goal5. With this in mind, plus the variability of donors, let’s say the campaign was able to secure half of the goal ($50,000) through 100 separate donations of $500 each. With a 2.9% + $0.30 fee taken from each donation2, that would leave members of Marianne’s family with $48,520 before tax1.

LIFE INSURANCE HYPOTHETICAL

At 62, Marianne opened a 10-Year Term Life insurance policy with GBU. For roughly $43.83 a month3, Marianne has peace of mind knowing that her family will receive a $100,000 death benefit should she pass away unexpectedly in the first 10 years of her retirement. Marianne named her son, Jeff, as a beneficiary on the policy. This means any and all death benefits would be paid out to Jeff, as long as Marianne was current in her premium payments. Even with 10 years of premium payment, Marianne would have only paid $5,259.60 for a potential $100,000 guaranteed benefit. That’s $100,000 for the covered claim, non-taxed and available to collect as long as the policy is current and up to date with payment.

EXAMPLE RESULTS

Crowdsourcing App 10-Year Term Life
Goal $100,000 $100,000
Gain Donors Monthly Premium
Cost - est. $43.83/month(3)
Raised 50% 100%
Taxes 3.07%(6) -
Fees 2.9% + $0.30 per donation(2) -
Benefit $48,520 $100,000

CONCLUSION

In conclusion, in this hypothetical example, term life insurance coverage was the more feasible solution for covering the potential loss of a loved one.

For more information on additional benefits and financial planning, visit gbu.org for life insurance and annuity products.

  1. H&CO. (n.d.). GoFundMe Tax Implications. Hco.com. Retrieved November 8, 2023, from https://www.hco.com/insights/gofundme-tax-implications#:~:text=The%20IRS%20has%20specific%20rules,line%20of%20your%20Form%201040.
  2. GoFundMe (2023, June 16). No fee to create a fundraiser. Support.Gofundme.com. Retrieved November 8, 2023, from https://support.gofundme.com/hc/en-us/articles/203604424-Learn-about-fees#:~:text=No%20fee%20to%20create%20a%20fundraiser&text=However%2C%20to%20help%20us%20operate,charges)%20per%20donation%20is%20deducted.
  3. This is under the assumption that the recipient was in otherwise good health upon receiving a life insurance policy from GBU Life.
  4. Olya, G. (2019, August 19). The Cost of Dying in All 50 States. Finance.Yahoo.com. Retrieved November 8, 2023, from https://finance.yahoo.com/news/cost-dying-50-states-090000597.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_.
  5. Lee, B. Y. (2022, February 5). Most GoFundMe Campaigns for Medical Bills Fail, Less Than 12% Reach Goals. Forbes.com. Retrieved November 8, 2023, from https://www.forbes.com/sites/brucelee/2022/02/05/most-gofundme-campaigns-for-medical-bills-fail-less-than-12-reach-goals/?sh=31f5c5f63f69.
  6. smartasset. (n.d.). Pennsylvania Income Tax Calculator. Smartasset.com. Retrieved November 8, 2023, from https://smartasset.com/taxes/pennsylvania-tax-calculator.


GBU Life is the marketing name for GBU Financial Life (GBU), Pittsburgh, PA. GBU and its agents do not provide tax, legal or investment advice. Please consult with a legal or tax professional prior to the purchase of any contract. Products and features may not be available in all states. This is a summary of the contract provisions. Please refer to the contract for details of surrender charge schedule, benefits and exclusions. Contract Form Series: ICC20-ST, FL20-ST.2, GEN20-ST, ND20-ST.

By Lesley Mann May 29, 2025
As we move into the second quarter of another exciting year, I want to take a moment to reflect on our accomplishments and share some of the new initiatives we are implementing in the realms of sales, marketing and community engagement. Over the past year, GBU Life has reached significant milestones thanks to the dedication and hard work of our team and the trust and support of our members. Our sales department has exceeded targets, and we have expanded our reach to more communities than ever before. We have launched several successful marketing campaigns that have not only increased our visibility but have also strengthened our brand's presence in the industry. For this year, our focus will be educating potential new members on the importance of securing their financial futures through life insurance and annuity products while serving their communities as part of our great Society. Looking ahead, we are committed to enhancing our sales strategies to better serve you. We are introducing some tools for our agents to enhance our products. One new tool is our Defined Benefit Annuity program which combines the Future Flex Fixed Index Annuity (FIA) with a software tool that can help determine retirement savings needs and break them down into contributions over time to help you meet your retirement goals. Be sure to keep in touch with your GBU agent to review your plans and products to see how adding an FIA to your retirement planning can help boost your savings efforts
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