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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

103

:
LIFE INSURANCE POLICIES AND ANNUITY CONTRACTS






Subchapter

001
:
GENERALLY










 

§

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.)