Expert Q&A

Is the benefit that my beneficiary receives from my life insurance policy free of tax?


Related Topics: Life and Disability Insurance
Related Tags: Beneficiary
David Cost
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By David Cost - The Rikedom Group
Answered about 3 years ago

Your agent should make it abundantly clear to you when you purchase a plan. If you haven’t seen your agent for years- Check with a local tax professional or the call the insurance company directly- most of the time, benefits are received tax free. Make sure you understand your states particular views on different life insurance arrangements.

David  I. Strunc, CRPC
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By David I. Strunc, CRPC - Sunrise Wealth Advisors, Inc.
Answered about 3 years ago

Usually the benefit is received by the beneficiaries income tax-free, but not estate taxes in some cases. Group policies through your employer may be taxed to beneficiaries after the first $50,000 but you will need to check with you local tax professional.

Robert F. Caime
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By Robert F. Caime - New York Life
Answered over 3 years ago

Generally, all proceeds to a beneficiary are tax free. There are cases where this may differ such as policies that are owned by third parties, or purchased through a pension plan.

Gil Edwards
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Answered over 3 years ago

The death benefit proceeds from a life insurance policy are almost never subject to federal income taxes, but may be subject to federal estate tax in some situations.

Stiles  Bee IV
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By Stiles Bee IV - Stiles Bee IV State Farm
Answered over 3 years ago

In most cases yes. However, you would need to consult your tax advisor.

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