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 Tax

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

    An indirect bequest of assets to a beneficiary by means of a ...
  6. Gift Splitting

    A taxation rule that allows a married couple to split a gift's ...
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. Taxes

    What Are Gift Taxes?

    If you're not sure what gift taxes are, read on and we'll explain.
  3. Taxes

    How to Avoid Gift Taxes

    For most, the answer to the question, “How much is the gift tax?” can be “nothing."
  4. 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.
  5. Taxes

    Fund a Lifetime of Giving with Donor Advised Funds

    Donor advised funds can have tremendous tax, cost and administrative benefits.
  6. 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.
  7. Taxes

    How to Give a Tax-Saving Gift Before The Year Ends

    Giving to charity and family members before year-end can help you save on 2016 taxes.
  8. 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.
  9. Investing

    Putting Your Money to Work for the Greater Good

    There are several ways to put your capital to work for social or charitable causes, while also facilitating moves that support your personal finance goals.
  10. Taxes

    2 Charitable Tax Planning Tips for the End of the Year

    These strategies help support your favorite qualified charity while also reducing your tax liability to Uncle Sam.
Hot Definitions
  1. Leveraged Buyout - LBO

    The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. ...
  2. Current Assets

    A balance sheet account that represents the value of all assets that can reasonably expected to be converted into cash within ...
  3. Tax Liability

    The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable ...
  4. Preferred Stock

    A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares ...
  5. Net Profit Margin

    Net Margin is the ratio of net profits to revenues for a company or business segment - typically expressed as a percentage ...
  6. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
Trading Center