Is Life Insurance Subject To Federal Income Tax?
12689 POINTSview profileTed RatliffOwner, SFS Associates,In most cases the death benefit of a life insurance policy is not taxable as income. The only exception would be that if the type of policy seems to the IRS to be an investment in disguise. This is very rare. This is what makes life insurance an attractive way to save for final expenses.Answered on May 30, 2013flag this answer
11783 POINTSContact Meview profileLarry GilmorePROAgent Owner, Gilmore Insurance Services, Marysville, Washington StateIs life insurance subject to income taxes? Usually, the answer is no. The proceeds of the death benefit are usually considered to be income tax free to the beneficiary because the policy owner had already paid taxes on the premium. Where the taxation would change would be where a tax deduction was taken on the premium.Answered on May 31, 2013+01+1 this answer
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