When Do You Pay Taxes On Life Insurance?
61667 POINTSview profileSteve SavantSyndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale ArizonaLife insurance death benefit proceeds are paid to the policy beneficiary and are generally tax free. Depending upon the policy owners total asset base, proceeds could be included for estate taxation purposes. Cash value life insurance that is surrendered, terminated or matures with gain in the contract (including policy loans that exceed basis) will be subject to ordinary income taxes.Answered on August 8, 2013flag this answer.JPG)
63333 POINTSview profilePeggy MaceMost of the U.S.You pay taxes on life insurance in the year you received the benefits, if you need to pay taxes. If there is interest on the proceeds due to receiving the death benefit as installments, you will be given a Form 1099-INT with the amount for which taxes are owed. Estate taxes also apply if beyond the exempt amount.Answered on September 15, 2013flag this answer
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