There are several ways that life insurance can be used to make a gift to SMU. A gift as simple as naming SMU as the beneficiary of all or part of a life insurance policy provides a donor with the security of owning the policy while also ensuring a future gift. Such a gift can provide very attractive estate tax benefits.

Naming SMU as owner and beneficiary of a life insurance policy that is fully paid up entitles the donor to a deduction equal to his or her cost basis in the policy, or its replacement cost, whichever is less.

Naming SMU as owner and beneficiary of a policy that has not been fully funded provides an income tax deduction approximately equal to the policy's surrender cash value. Continued payments by the donor to cover the cost of premiums are deductible to the donor for income tax purposes in the year those gifts are made.