What Are The Tax Implications Of Life Insurance?

  1. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    Life insurance is generally passed to a beneficiary income tax free. If the policy is left to the Estate, or if no beneficiaries listed on the policy are still alive (and the proceeds go to the estate by default), then income tax will be charged. If the policy's death benefit is over the exempted amount for state and/or federal estate taxes, those will also apply.
    Answered on October 9, 2013
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