ANSWERS: 1
  • If you're talking about the pay out ("benefit") when the insured dies, in the USA at present, if the beneficiary is the insured's spouse, the answer is NO, they do not constitute "taxable income" -- and for the same reason, life insurance premiums on such policies are not deductible. If the beneficiary is not the deceased's spouse, I think it depends on who was making the premium payments (the beneficiary, the insured, or a 3rd party) and the nature of the policy, but best to contact a tax specialist.

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