A bill to allow a deduction for the amount of the premiums paid on a life insurance contract the beneficiary of which is a trust established for the benefit of a disabled individual, and for other purposes.

Amends the Internal Revenue Code to allow a deduction for the amount of the premiums paid on a life insurance contract the beneficiary of which is a trust established for the benefit of a disabled individual. Requires the insurance contract to be on the life of the taxpayer, the taxpayer's spouse, or a former spouse. Limits the amount of the insurance contract to $100,000.

Sets forth rules for the establishment and operation of the trust for the benefit of a disabled individual. Provides that amounts distributed from such trust shall not be included in the gross income of the beneficiary of a qualified disabled individual's trust.

Provides that the proceeds of the insurance contract shall be excluded from the estate of the taxpayer, and includes in the gross estate of the income beneficiary of the trust the remaining portion of the corpus attributable to the insurance contract and any accumulated income attributable to such amount. Sets forth a formula for computing the estate tax on this amount.