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.