A gift of insurance can be recorded (and set up as an asset) in an amount equal to the cash surrender value of the insurance policy (not for the amount of the death benefit).   After the gift of insurance has been made, your organization owns the insurance policy and, as an investment decision, can decide whether or not to continue paying premiums or to cash the policy in for its cash surrender value.  

If the policy is kept, your organization will pay period premiums which are an expense to whatever fund holds the insurance policy asset.   Periodically, as statements are received, your organization should update the asset value of the policy via a straight journal entry.  

Sample Journal entries:  

Receipt of initial gift:
Debit - Insurance Policy Held (asset)
Credit - Gift (revenue)

Payment of premium:
Debit - Insurance Premium (expense)
Credit - Checking (asset)

Receipt of statement showing interest earned and updated cash surrender value:
Debit - Insurance Policy Held (asset)
Credit - Interest/gains (revenue)

Note: The preceding information is general in nature and provided for high level informational purposes.  Contact the IRS for up-to-date regulations.  Your auditor should provide the final say on FASB stipulations.