Development Policy Manual D.5. In order that an insurance policy may be reported as a gift, the University must be named both irrevocable owner and beneficiary. For reporting purposes, the value of the policy is its cash surrender value at the time of the gift, not its face value.
Insurance policies are to be treated as securities for reporting purposes.
When a life insurance policy is given, it may be surrendered immediately for its cash value, or it may be maintained, in which case it is considered a deferred gift. If the policy is maintained, the difference between the policy's cash surrender value and its settlement value on the donor's death is not reported as a gift, but as gain on the disposition of assets. If, after giving the policy, the donor continues to make periodic gifts to enable the University to pay the premiums, these are to be reported as separate cash gifts to the Univer- sity. When the University receives the proceeds of a policy in which it was named beneficiary but not owner, the full amount received is reported as an outright gift of cash as of the date of receipt. Tax Deduction for Gifts of Life Insurance Amount of deduction for a gift of a policy.