Call Us Toll-Free With Any Questions | 844.9LIFE4U (844-954-3348)
Life is complicated. Choosing the right life insurance policy shouldn't be.

Great news...Since life insurance premiums are typically paid with after-tax dollars (money that has already been taxed), life insurance proceeds payable to a named beneficiary (a real person) are free of federal income tax. So, 100% of the benefit is tax free.

However, if the life insurance death benefit is paid in installments instead of a lump sum, the interest portion (if any) is taxable at ordinary income rates. The principal is always tax-free.

The insurance proceeds may be included in the taxable estate of the owner. Not to worry, though... estate taxes are not an issue for most people. The only time they become an issue is if the net taxable estate (after certain deductions)at the Federal level is over $5.6 million in 2018. You may also have to confirm whether in fact the state in which the decedent died has an estate or inheritance tax independent of the federal tax.  At that point the beneficiary would have to worry about estate taxes.

Posted 4:39 PM

Share |

No Comments

Post a Comment
Required (Not Displayed)

All comments are moderated and stripped of HTML.
Submission Validation
Change the CAPTCHA codeSpeak the CAPTCHA code
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2019
  • 2018
  • 2017

View Mobile Version
Instant Quote
We love referrals! And thank you even more for your continued business.
From Our Blog
View our latest blog posts any time of the day, directly from our website.
Join Our Newsletter
Stay in touch with the latest events, news and offers we have.
From Our Blog From Our Customers

Read More Read More
Stay In Touch With Us Helpful Site Links Read the News
Sign up now to receive new and updates Stay up-to-date with the latest industry, community and agency news through our newscenter. We also provide handy hints on how to save on your insurance.

Read More
Find Out How Much Money You Can Save on Life Insurance 
Powered by Insurance Website Builder