No, not generally. There may be some circumstances where life insurance payouts may be taxable, but these are unusual. Check with your tax adviser. If you are looking to qualify for Medicaid then cash value may affect qualification, depending on your State. Life insurance proceeds are generally non-taxable to a beneficiary.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Life insurance proceeds are income tax-free. So, in short, no - the payout of proceeds from a life insurance policy are not included in your gross income (assuming you're referring to your tax return).
I hope the information is helpful - please feel free to contact me for help and if you have any further questions. Thanks very much.
Life insurance proceeds are typically income tax free. If you own a cash value plan such as whole life or universal life, the cash value build up can be taxed and is counted as an asset if the policy were ever to be cashed out or cancelled. Always contact your agent or advisor to avoid a costly mistake.
That is a great question! I am happy to tell you that one of the greatest benefits of having life insurance is that very rarely are the proceeds ever taxable. Since the premiums are paid after tax, the benefit returns tax free. Your beneficiary does not have to claim that money on any tax forms. Thank you for asking!
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I hope the information is helpful - please feel free to contact me for help and if you have any further questions. Thanks very much.