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A death benefit set up properly by your agent should not be taxed. On term life insurance there is no cash value so the only benefit is the death benefit.
On permanent life insurance plans such as whole life and universal life insurance, these plans do build a cash value that does earn interest. However, this is tax deferred interest, meaning as long as the plan is in force there is no tax on gains. When you withdraw funds from the cash value, you will have two options with two different tax consequences.
The first is if you cancel or lapse the policy and take the cash value, then yes, these proceeds or interest are taxed as income. However, if you borrow from your own cash value, then the IRS sees this as a loan and the funds are now tax free. I recommend speaking to your agent or advisor to avoid a costly mistake. The second loan aspect would almost always be preferred over cancellation to avoid taxes.