If the policy is paid-up (i.e., no more premiums are due), or you have made some premium payments but not all of them, the charitable deduction will be the lesser of the policy’s fair market value (which is approximately its cash surrender value) or the total of your net premium payments. To qualify for a deduction, you must make us the irrevocable owners as well as beneficiary of the policy. If you name us beneficiary but retain ownership of the policy, the IRS holds that you have not made a completed gift and therefore cannot claim a deduction. Similarly, there is no deduction for taking out a new life insurance policy, even if you make us irrevocable owners. You can claim a deduction for gifts you make to us that offset our ongoing premium payments on the policy (since we’re the owner, we pay the premiums).