CHAPTER FIFTEENContributions of and Using Life Insurance
- § 15.1 Introduction
- § 15.2 Life Insurance Concepts
- § 15.3 Charitable Giving and Insurance
- § 15.4 Insurable Interest
- § 15.5 Unrelated Debt-Financed Income Law
- § 15.6 Charitable Split-Dollar Insurance Plans
- § 15.7 Insurance Contract Reporting Requirements
Life insurance can be the subject of a charitable gift. It can be considered part of the panoply of planned gifts, although a split-interest trust is not usually involved. A gift of life insurance is a particularly good way for a younger donor to make a major gift to a charitable organization.
§ 15.1 INTRODUCTION
A person may make a gift of life insurance to a charitable organization. Where a federal income tax charitable contribution deduction is desired, the donor must make the charity the owner and beneficiary of the insurance policy.
An individual can contribute a fully paid-up life insurance policy or a single-premium policy to a charitable organization and deduct, for income tax purposes, its replacement value.1 Alternatively, an individual can acquire a life insurance policy, contribute it to a charitable organization, pay the premiums, and create a charitable contribution deduction for each premium payment made.
For an income tax deduction for a gift of life insurance to be available, the insurance contract must be ...
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