Donate a life insurance policy

Share Your Future

Naming the BHI Foundation as a beneficiary or owner of a life insurance policy is a powerful way to make a lasting gift. You are able to make a significant contribution without affecting your current cash flow while still supporting residents and the mission for years to come.

How to Get Started

Important Legal Information

  • Legal name
    BHI Foundation, Inc
  • Address
    8330 Allison Pointe Trail, Indianapolis, IN 46250
  • Tax ID
    (EIN) 35-1680796
  • The BHI Foundation is a 509(a)(3) supporting organization; contributions are tax-deductible under U.S. and Indiana law.

Can I donate my life insurance policy to charity?

Can I donate my life insurance policy to charity?

If you have a life insurance policy that you no longer need because of a change in your life circumstances, you can give a paid-up policy to the BHI Foundation. You can also donate a policy you are still paying premiums toward, though you may be required to donate the annual amount necessary to maintain the policy in-force; this is on a case-by-case basis and determined after review.

What types of insurance can be donated to charity?

Both term and permanent life insurance policies can be donated to the BHI Foundation. However, a permanent policy is more conducive to donating. Both policies that are fully paid and those with ongoing premiums can be accepted, although those with premiums will need further review.

  • A term life insurance policy has an end date, meaning if you outlive your policy, the money won’t be donated. 
  • A permanent life insurance policy will guarantee your money goes to your chosen charity, as it lasts your whole life.

Benefits of donating life insurance

One of the main benefits of donating a life insurance policy to charity is that it can increase the amount you’re able to give. For example, if you pay $100,000 in premiums on a life insurance policy, the death benefit could be double that or more. 

Donating life insurance can also be a more affordable way of contributing to charity. Rather than giving a large amount all at once, you can pay the smaller monthly premiums and still make a substantial donation to a charity, like the BHI Foundation.

Additionally, your charitable gift of a life insurance policy may:

  • Reduce your taxable estate and lower estate taxes
  • Provide tax deductions for both the current value of the policy and for any future premium payments

While BHI Foundation representatives are happy to discuss planned giving options, you should consult a tax advisor or other professional for additional information regarding your specific situation.

How to donate life insurance to charity

There are a few simple ways to set up a gift of life insurance. You can change the owner of the policy, name a charity as a beneficiary or add a charitable giving rider.

  • Change the owner of a life insurance policy
    One way to donate a life insurance policy to a charity, like the BHI Foundation, is by transferring ownership of the policy to the charity itself. You can transfer ownership of a paid-up policy or a policy on which you are still paying premiums. When you transfer ownership, the charity gains full control of the policy and can name itself the beneficiary, allowing the charity to receive a tax-free payout after your passing. 
  • Name a charity as the beneficiary of life insurance
    You can name a charity, such as the BHI Foundation, as a beneficiary to your life insurance policy. You can also name more than one beneficiary and divide the policy amount. Some donors may name multiple individuals or multiple charities as beneficiaries of their life insurance policy.

    If you choose this option, you will still have full control of the policy during your lifetime.
  • Add a charitable giving rider
    A charitable giving rider is an add-on to a term life insurance policy that stipulates an additional benefit will go to a charity of your choosing, like the BHI Foundation, when a claim is filed. This ensures a charity will receive a payout without the need to add them as a beneficiary or transfer ownership of the policy.

    Charitable giving riders are not available with every life insurance policy. Speak to your insurer to see if this feature is available for your policy.

We are here to help. Please reach out to:

Major & Planned Giving Office

765-543-3289

info@bhifoundation.org

Wording Examples & Key Considerations

Sample Designation Wording

“I designate BHI Foundation, Inc., or its successor, as beneficiary of ___% (or entire) of the death benefit of policy number _____, issued by [Insurance Company Name].”

Or, if transferring ownership:
“I assign all ownership, rights, and privileges of policy number _____ to BHI Senior Living Foundation, Inc., as owner and beneficiary.”

Important Details to Keep in Mind

  • Confirm policy numbers, insurance company name, and correct legal name, address, and EIN for BHI.
  • Let your insurance company and trustee (if applicable) know of the change to update records.
  • If you’re transferring ownership, there may be gift tax implications — check with your advisor.
  • If the policy has cash surrender value, that may affect deductibility or gift valuation.
  • Be clear whether you’re giving all, or a percentage, of the policy’s death benefit.

Frequently Asked Questions

Not necessarily. You can use an existing policy and simply change the beneficiary or ownership designation.

Yes, depending on how the policy is structured, you or a beneficiary may retain rights or access during your lifetime.

You typically can update beneficiaries unless ownership has already transferred. Always notify BHI and the insurance company of changes.

If you transfer ownership, you may receive a charitable deduction based on the policy’s current value. Consult your tax advisor.

Yes, you may designate BHI to receive a portion (e.g. 50%) of the death benefit, with the rest going to other named beneficiaries.