Gifts of life insurance

A donor's life insurance policy could be a versatile and valuable asset to make a significant charitable gift to benefit the campus, college, or program of their choice at the University of Minnesota.

Advantages of a life insurance gift include: 

  • No minimum gift amount. 
  • Proceeds are paid immediately following death and are not subject to probate.
  • Life insurance beneficiary designation

Donors can designate the University of Minnesota Foundation ( as the beneficiary for some or all of the proceeds of any life insurance policy by requesting the necessary beneficiary designation forms from the insurance company.

Ways to give life insurance

A gift of paid-up policy can be made by making the U of M Foundation both the beneficiary and the owner of an existing life insurance policy. If the policy is “paid-up” (meaning that any premiums are being paid from the cash accumulated in the policy), the foundation generally will cash in the policy and direct the funds according to a donor's wishes.

The donor may be entitled to a charitable deduction based on the cash value or the cost basis in the policy, whichever is lower. A gift of a policy with continuing premium payments offers the option to keep the policy death benefit in force by paying the premiums.

If a donor chooses to do so, they may receive a charitable deduction for the amount of each premium payment (made as a charitable gift to the U of M Foundation, which then pays the premium as owner of the policy). If the donor chooses to stop paying the premiums, the foundation, as owner, will typically surrender the policy and apply the proceeds as the donor has directed.

Note: the U of M Foundation does not recommend creating a new policy for the sole purpose of making a charitable gift. If a donor is considering such a gift, they should contact a U of M development professional.

A gift of a policy with no cash value, such as term insurance, does not result in an immediate charitable deduction for the donor, but could result in an annual charitable deduction if the donor continues to pay the premiums.