Loading the player...

DEFINITION of 'Charitable Gift Life Insurance'

A method of contributing to charity by taking out life insurance on yourself with the charity as a beneficiary. Using charitable gift life insurance may allow donors to amplify their giving power. Rather than giving large cash gifts as part of a will, some donors find it easier to simply pay the life insurance premiums.

BREAKING DOWN 'Charitable Gift Life Insurance'

Using charitable gift life insurance means the donor does not get a tax deduction for the premiums paid. However, the amount of the death benefit paid to the charity will be deductible for estate tax purposes. Charitable gift life insurance may also be less likely to cause probate disputes, since the intention to make the gift is clearly laid out by the insurance contract.

RELATED TERMS
  1. Immediate Beneficiary

    A beneficiary designation most commonly used in charitable gift ...
  2. Life Income Plan

    A type of philanthropic strategy where cash or property is transferred ...
  3. Fractional Gift

    A gift that provides a fractional interest in an artwork today, ...
  4. Gift

    Property, money or assets that one person transfers to another ...
  5. Gift Tax

    A federal tax applied to an individual giving anything of value ...
  6. Gift In Trust

    An indirect bequest of assets to a beneficiary by means of a ...
Related Articles
  1. Insurance

    Using Life Insurance To Make Charitable Donations

    Your life insurance policy can be a great tool for charitable giving. Find out how.
  2. Financial Advisor

    Top Tips for Maximizing Charitable Deductions

    Charitable donations can be a great financial planning tool. Here are some ways to make the most of them.
  3. Retirement

    Choosing The Best Charitable Gift Annuity

    Want to support a cause you care about, but still earn income from that donation in your retirement years? This vehicle offers both.
  4. Financial Advisor

    How to Use Life Insurance to Manage Legacies

    These are some of the legacy-building ways that life insurance policies can be used.
  5. Financial Advisor

    How to Grow Your Business with Donation Strategies

    Advisors who offer clients expertise in how to charitably donate will likely build a stronger practice and capture more business. Here's why.
  6. Insurance

    The Dangers Of Stranger-Owned Life Insurance

    Find out how these policies can be used to abuse the system that many people rely on for protection.
  7. Retirement

    Gifting Your Retirement Assets To Charity

    There are several things to consider when it comes to this type of charitable giving. Make sure you're well informed.
  8. Retirement

    Guiding Clients on Charitable Remainder Trusts

    Clients who wish to make donations to charity can reap an enormous tax deduction with charitable remainder trusts, but it must be set up correctly.
  9. Financial Advisor

    How to Gift Your Way to Lower Estate Taxes

    Estate planning is not just for inheritance. High net-worth individuals, who plan properly, can gift their money and save on taxes.
  10. Financial Advisor

    Charitable Giving: How to Help Clients Do More

    The use of donor-advised funds is on the rise, but advisors could be doing more to engage their philanthropic clients. Here are some talking points.
RELATED FAQS
  1. Justin and Britney, multi-millionaires, want to make the maximum gift of cash to ...

    The correct answer is c. A donor of money and/or gifts may give up to $12,000 to as many different recipients as they desire ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center