Family Office Definition: Charitable Giving With a Life Insurance Policy
Charitable Giving With a Life Insurance Policy definition: Charitable giving with a life insurance policy donates the entire death benefit to a charity. The donor receives a reduction in the taxable estate for the size of the policy and pays premiums that amount to only a fraction of the policy face value. Once the decision is made to gift a policy, all annual premiums paid from that point forward are deductible from income taxes. A charity can also be named as the sole or one of several beneficiaries to a policy with the ability to make changes in the future (In this case, premiums are not income tax deductible, and only the portion donated to charity is excluded from the taxable estate. The policy must be given irrevocably in order for the donor to receive full tax benefits.).
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