Gifts of Life Insurance

Some friends of Kanuga find they are carrying more life insurance than family obligations require. Their surplus, paid-up life insurance policies can be used to fund a significant gift to Kanuga.

The charitable deduction for this kind of gift is either the fair market value of the policy or the policy’s cost basis (the total of net premium payments), whichever amount is less.

PLEASE NOTE: If a donor has borrowed against an insurance policy, a gift of the policy will create taxable income for the donor, in the amount of the difference between the loan balance and the total of the premium payments.

Younger friends of Kanuga may be interested in taking out a new insurance policy as a gift to Kanuga.

In this case, a donor makes annual gifts to Kanuga in the amount of the life insurance premium payments. Kanuga, in turn, pays the premiums to the insurer.

It is important that Kanuga be named the irrevocable owner of a new policy because the IRS does not allow deductions for premiums if the donor has retained ownership of the policy.


For information and assistance with any form of giving to Kanuga, please contact Randy Boone, Kanuga’s director of development, at 828-692-0077, ext. 240, or . Persons considering a sizeable donation to Kanuga or interested in providing for Kanuga in their estate plan should seek the advice of a financial advisor and/or attorney.