The Vermont Statutes Online
Banking and Insurance
LIFE INSURANCE POLICIES AND ANNUITY CONTRACTS
3711. Charitable life gifts
(a) A life
insurance contract may be entered into in which a person paying the
consideration for such insurance has no insurable interest in the life of the
individual insured, provided that a charitable, benevolent, educational, or
religious institution or its agency or any other organization that qualifies
under Section 501(c)(3) of the Internal Revenue Code is irrevocably designated
as the owner and beneficiary of the contract.
(b) In making
such a contract, both the owner and the insured shall make and sign the joint
application. The person paying the premium shall irrevocably designate a
charitable, benevolent, educational, or religious institution, or an agency of
such an institution or any other organization that qualifies under Section
501(c)(3) of the Internal Revenue Code, as the irrevocable owner and
beneficiary of such contract.
(c) If a
prospective insured applies jointly for a life insurance policy which
irrevocably names a 501(c)(3) organization or nonprofit as owner and
beneficiary then, at the time of such joint application, an insurable interest
is created for the entity in the prospective insured's life. Before an
application may be made for such a policy, the insurer shall provide the
prospective insured with a written disclosure to remind the prospective insured
to consider his or her current state of health and to consult with a tax
advisor or estate planner.
(d) Nothing in
this section shall prohibit any combination of the applicant, premium payer,
owner, and beneficiary from being the same person.
(e) This section
does not alter the insurable interest requirements of any other law. (Added
2003, No. 20, § 1.)