Is There Income Tax On Life Insurance?

1. 

   61667 POINTS

   view profile
   Steve Savant

   Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

   Generally, tax free death benefit proceeds go directly to the policy beneficiary without taxation. However, permanent life insurance polices that accumulate cash values that exceed basis are subject to ordinary income tax if the contract is surrendered, lapsed or matures before the death of the policy insured. This includes any policy loans in any of these scenarios.

   Answered on August 4, 2013

   flag this answer
2. 

   63333 POINTS

   view profile
   Peggy Mace

   Most of the U.S.

   Life insurance is not subject to income tax as long as it is left to a person or trust. If the life insurance beneficiary is the estate, or if the beneficiary is no longer alive and the proceeds end up going into the estate, then income tax will be paid on the life insurance.

   Answered on August 4, 2013

   flag this answer
Did you find these answers helpful?
Yes
No
Go!

Add Your Answer To This Question

You must be logged in to add your answer.