If you have a life insurance policy you no longer want, one option is to donate it to charity. For example, say you have paid a total of $50,000 in premiums on a life insurance policy over 20 years. You might decide to give the policy to your favorite charity.
In such a situation, you probably can take an income tax deduction for the $50,000 you’ve paid in premiums. It’s true that you might not be able to take a complete writeoff in Year One but any unused deduction can be spread over the next five years.
After the donation, you can write checks to the charity in future, taking additional tax deductions. Then the charity can use that money to keep the policy in force until it collects the death benefit. Alternatively, the charity can either (1) use its own money to keep the policy in force or (2) surrender the policy and receive its cash surrender value.