How to Donate a Life Insurance Policy to a Charity in the USA (Complete 2025 Guide)

Many Americans want to make a meaningful impact — whether it’s helping a church, a medical charity,
a veteran’s organization, an animal rescue, or a nonprofit they care deeply about.
One of the most powerful and often overlooked ways to do that is by
donating a life insurance policy to a charity.

This type of gift doesn’t require large cash donations today. It allows you to create a lasting legacy
that supports a mission long after you’re gone. And for many families,
it’s one of the most affordable ways to make a major charitable contribution.

Ways to Donate a Life Insurance Policy to a Charity

1. Name the Charity as a Beneficiary

This is the simplest and most common option.
You remain the policy owner but assign the charity to receive all or part of the death benefit.

• You keep full control of the policy
• You can change beneficiaries anytime
• No tax deduction today — benefits may apply later through your estate

2. Transfer Ownership of Your Policy

You can transfer complete ownership of an existing policy to a charity.
The charity becomes the policy owner and beneficiary.

• You may receive a current tax deduction
• The charity can keep the policy or cash it out
• The gift becomes immediate and irrevocable

3. Donate Policy Dividends or Cash Value

If you have a whole life policy with accumulated cash value, you can donate the cash value or the annual dividends.

4. Take Out a New Policy for the Charity

Some donors create a brand-new life insurance policy and name the charity as the owner and beneficiary.
This allows you to leave a larger gift than you could give in cash.

Why Donating a Life Insurance Policy Is So Meaningful

• Low cost today — major impact in the future
• Tax benefits may apply depending on how you donate
• Allows you to leave a legacy without changing your lifestyle
• Perfect for churches, ministries, schools, and charitable causes
• Transforms an old or unused policy into a powerful gift

This strategy has become popular across the United States, especially among seniors,
families with strong charitable values, and donors who want to make a difference but prefer a tax-efficient method.

Is Donating a Life Insurance Policy Tax-Deductible?

It depends on how the gift is structured.

If the charity becomes the owner:

You may qualify for an income tax deduction for:

• The policy’s fair market value
• Any future premium payments you make

If you only name the charity as a beneficiary:

No immediate tax deduction, but the gift may reduce the taxable value of your estate.

Every state has its own tax considerations — always discuss your plan with a CPA or tax attorney.

What Types of Policies Can Be Donated?

Whole Life Insurance

Great for donating cash value or transferring ownership.

Term Life Insurance

Perfect if you simply want to name a charity as the beneficiary.
This creates a meaningful gift at very little cost.

Paid-Up Life Insurance Policies

These are extremely valuable gifts because the charity can access value immediately.

How to Donate a Life Insurance Policy (USA Step-by-Step)

Step 1: Choose the Charity

Confirm the nonprofit is a qualified 501(c)(3) organization.

Step 2: Decide How You Want to Donate

• Name as beneficiary
• Transfer ownership
• Donate cash value
• Start a new policy

Step 3: Coordinate With the Charity

Most charities have a planned giving department to help with paperwork.

Step 4: Update Your Policy

We help you complete beneficiary forms or ownership transfer forms correctly.

Step 5: Review Tax Benefits

We’ll work with your CPA to make sure everything is documented properly.

Why Work With Mintco Financial?

• We personally answer our phones — no call centers, no AI responders
• We guide you step by step
• We coordinate directly with your charity
• We help structure the donation correctly
• No fees for quotes or consultations
• We’re a boutique firm focused on relationships and doing what’s right

Donating a policy is one of the most meaningful financial decisions a person can make.
We’re honored to help families across the United States walk through it.

Get Help Donating Your Life Insurance Policy

If you want clear guidance, honest answers, and real human help — we’re here for you.

No pressure. No cost. Just personal support from our team.