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. Gift

    Property, money or assets that one person transfers to another ...
  3. Fractional Gift

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

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

    A taxation rule that allows a married couple to split a gift's ...
  6. Donor Advised Fund

    A private fund administered by a third party and created for ...
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

    How to Avoid Gift Taxes

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

    Fund a Lifetime of Giving with Donor Advised Funds

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

    Gift-Giving Etiquette

    Here's a look at how much you should spend and what you should give this holiday season.
  8. Taxes

    What the Gift Tax Rules Mandate

    The lifetime maximum for gift taxes is now $5.6 million. Here's how the gift tax works.
  9. Taxes

    3 Charitable Giving Strategies Anyone Can Use

    Here are three charitable giving ideas that the average American can use.
  10. 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.
Hot Definitions
  1. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
  2. Drawdown

    The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted ...
  3. Inverse Transaction

    A transaction that can cancel out a forward contract that has the same value date.
  4. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  5. Solvency

    The ability of a company to meet its long-term financial obligations. Solvency is essential to staying in business, but a ...
  6. Dilution

    A reduction in the ownership percentage of a share of stock caused by the issuance of new stock. Dilution can also occur ...
Trading Center