Yes, life insurance is tax free to the beneficiary. If there are estate taxes due (right now, federal estate taxes are charged on the excess if an estate is larger than $5,250,000), someone will have to pay them, so the beneficiary may be asked to pay a portion of those. Also, if the beneficiary takes the death benefit on a payment plan, they will be paid interest on the money not yet collected, and need to pay taxes on the interest. But in most situations, the beneficiary receives the death benefit 100% tax free.
President, Lane Independent Agency, Southern California
Death benefits are tax free to the beneficiary. This is a wonderful benefit of Life Insurance. If the beneficiary decides to leave the money with the insurance company to continue to grow, they would have to pay taxes only on whatever growth there was on that benefit, not the benefit originally paid in the policy. Also, if there was a very large estate, there might be some tax for the estate to pay. Life Insurance has some absolutely incredible tax benefits which I would be very happy to explain to you. You can even take cash out for a car, college, a new home, retirement, and if done properly, not pay any taxes on these funds. Just Call Me. Gary Lane, Agent, New York Life, 949 797 2424. Thanks.
Licensed Life Agent, Life and Finance/ 50 States, New York
Yes. Life Insurance Is tax free to the benificiary. This is how the policy will work for the family and estate. Life Insurance is paid out to the beneficiary lump sum, and tax free.
The will help recover from the financial losses currently or for the future. Life Insurance is designed to work for the future financial planning of the family, however anyone may be the benificiary to the policy, but the importance and true benefit is to aid in the financial recovery of the estate, or even create an estate for the family, and generations to come.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
Yes, Life iInsurance proceeds paid directly to your beneficiary go to that person completely tax free. Life Insurance proceeds may also not be attachable by any creditors. That having been said, if your beneficiary receives money from your life insurance and then invest that money, though the initial amount received is not taxable, anything that grown from that investment is. It is always a good idea for your beneficiary to consult with a financial planner, accountant or Tax Attorney to determine their best strategies.
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The will help recover from the financial losses currently or for the future. Life Insurance is designed to work for the future financial planning of the family, however anyone may be the benificiary to the policy, but the importance and true benefit is to aid in the financial recovery of the estate, or even create an estate for the family, and generations to come.