If I donate a life insurance policy to a charity, what tax credit does my estate receive?

The answer depends on how the donation is structured, and specific credit amounts aren't something to estimate here, but the general principle is that donating a life insurance policy to charity, whether during your lifetime or through your estate, generally generates some form of charitable donation tax credit or reduced income inclusion, reflecting the value transferred to the charity. If you transfer both ownership and beneficiary status to the charity during your lifetime, the charity may issue tax receipts as premiums are paid going forward. If instead you simply name the charity as beneficiary without transferring ownership, the death benefit paid to the charity on your death can generate a donation tax receipt to your estate, which can help offset tax otherwise owing on your final return.

Because the exact credit amount depends on the value involved and current tax rules, and because donation tax mechanics can change over time, this is an area where your estate's accountant or the charity's planned-giving office should confirm the specific numbers that would apply to your situation.

Talk to both a lawyer and an accountant before finalizing this kind of gift, since the structure you choose affects both the timing and the size of the tax benefit.