DEFINITION of 'Charitable Split-Dollar Insurance Plan'

Identical to a standard split-dollar insurance plan, except that a charity, instead of an employer, owns the life insurance policy. Charitable split-dollar insurance plans pay death benefit proceeds to the beneficiaries of the donor, just as standard plans pay proceeds to the beneficiaries of the employee.

BREAKING DOWN 'Charitable Split-Dollar Insurance Plan'

Taxpayers cannot deduct the contributions they make to a charity that are earmarked as premium payments anymore. This loophole was closed when the laws for standard plans were updated in 2003.

RELATED TERMS
  1. Charitable Gift Life Insurance

    A method of contributing to charity by taking out life insurance ...
  2. Life Insurance

    A protection against the loss of income that would result if ...
  3. Life Income Plan

    A type of philanthropic strategy where cash or property is transferred ...
  4. Insurance Proceeds

    The benefit proceeds paid out by any type of insurance policy ...
  5. Named Beneficiary

    This term refers to any beneficiary named in a will, a trust, ...
  6. Death Benefit

    The amount on a life insurance policy or pension that is payable ...
Related Articles
  1. Retirement

    How Private Split-dollar Life Insurance Works

    Understand how a private split-dollar life insurance plan can help leverage gifts and reduce estate taxes.
  2. Insurance

    Using Life Insurance To Make Charitable Donations

    Your life insurance policy can be a great tool for charitable giving. Find out how.
  3. 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.
  4. Retirement

    Why Own Life Insurance in a Qualified Retirement Plan?

    What are the pros and cons of owning cash value life insurance in a qualified retirement plan?
  5. Insurance

    Life Insurance: How Long Does It Take To Get Paid?

    How to file for a life insurance payout – and how long it takes to receive it. Plus, new ways to plan for payments that provide an income stream.
  6. Financial Advisor

    Avoid This Life Insurance Policy Pitfall

    Life insurance policies need to be reviewed regularly to make sure that the beneficiary you chose some time ago is still the right choice today.
  7. Financial Advisor

    Is Life Insurance From Your Employer Enough?

    Covering the needs of the ones you would leave behind is not easy. But efforts to secure a life insurance policy outside of work should pay off.
  8. Insurance

    Life Insurance as a Bonus Plan for Key Employees

    A Section 162 plan is a life insurance plan provided by an employer to key employees.
Hot Definitions
  1. Dow Jones Industrial Average - DJIA

    The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange ...
  2. Revolving Credit

    A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is ...
  3. Marginal Utility

    The additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important ...
  4. Contango

    A situation where the futures price of a commodity is above the expected future spot price. Contango refers to a situation ...
  5. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  6. Acid-Test Ratio

    A stringent indicator that indicates whether a firm has sufficient short-term assets to cover its immediate liabilities. ...
Trading Center