Is Keyman Life Insurance Tax Deductible?
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63333 POINTSview profilePeggy MaceMost of the U.S.Keyman life insurance is not tax deductible to the business owner who took out the policy on a key employee, if the business owner or the business is the beneficiary of the policy. If the key person policy is provided to a key employee and the beneficiary is not the business or business owner, the premiums may be tax deductible.Answered on February 23, 2014flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaBasically the question about deductibility of premiums has to do with how proceeds are to be taken. If the premium is deductible, then the proceeds are taxable income. In the situation of "key-man" the company would want the benefits to come to them income tax free--after all they have just lost a key employee and their profits are probably suffering as a result.Answered on February 25, 2014flag this answer
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