Charitable gift life insurance is a planning structure where a life policy is donated to a qualified charity, usually through ownership transfer or assignment.
Policy mechanics
After transfer, the charity may become beneficiary or owner depending on structure. The donor no longer controls the policy in the same way as before transfer.
Operational and tax considerations
The donor may receive tax treatment based on local rules, and insurer recordkeeping must reflect new ownership. Policy valuation and paid-up status become part of transfer documentation.
Claims sequence
Upon the insured event, payout flows according to the policyholder and beneficiary designations registered at the insurer.
Practical example
A donor uses a permanently paid-up policy, names a charity beneficiary, and updates underwriting contact and ownership records before surrender-free transfer.