Will I Be Taxed On Life Insurance?
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63333 POINTSContact Meview profilePeggy MacePROMost of the U.S.Life insurance does not incur income tax. That is a great feature about life insurance. It allows the beneficiary to get more money than if income taxes had to be paid on it, and makes the funds more quickly accessible (since it does not have to go through probate). if you take them death benefit in installments, you will pay income tax on the interest paid to you for the money you have not yet received.Answered on August 28, 2013+01+1 this answer
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10968 POINTSview profileTim WilhoitOwner, Your Friend 4 Life, Brentwood TNIf the beneficiary was properly set up at the point the policy was purchased, no there is no income tax on life insurance proceeds. However, there are polices written and the beneficiary is the estate instead of a person. In these cases, the policy must go through probate and is subject to the death tax.Answered on June 17, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! One of the big reasons why life insurance is a good thing to have is that the money paid out ( the death benefit, or face value) is received by your beneficiary tax free. You paid your premiums after tax, so the benefit is not taxable. It does not have to be shown as income. I hope that helps, thanks for asking!Answered on July 7, 2014flag this answer
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