Life insurance proceeds in California are not taxable for by income tax, in most cases. If Life Insurance is left to the estate, or goes to the estate because all beneficiaries are deceased, then it will be charged income tax.
Life insurance is subject to state and federal estate taxes when it exceeds the exemption. For federal estate taxes, the exemption is $5,250,000 in 2013.
No life insurance is not taxable in the state of California. California has neither an estate tax nor an inheritance tax, and as is usually the case, life insurance proceeds are not subject to income tax (unless the policy is held within a plan where premiums have been deducted from income i.e. life insurance inside a 401k plan).
President, Lane Independent Agency, Southern California
Life insurance is not taxable in California, but even more importantly, it is a great way to increase the value of your estate. The wealthy learned long ago, that income tax is a tax free way to increase your net worth. By putting money into Equity Indexed Universal Life Insurance, from National Life Group, sold by Premier Financial Alliance, your assets can grow as the stock market grows, but NEVER go down, when the market drops! It is really a no brainer. And then you can access your money as a loan, tax free, so long as you keep your policy open. When you die, your beneficiary gets the death benefit still in your open policy. You can even access the money for any reason during your lifetime. The death benefit will even be paid to YOU while you are still living, if you develop a chronic, critical or terminal illness. Others will say they have living benefits, but try and find anyone with all of our benefits. We were the first and we continue to be Number One. Thank you. GARY LANE. 714 422 9616. garylane@cox.net.
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Life insurance is subject to state and federal estate taxes when it exceeds the exemption. For federal estate taxes, the exemption is $5,250,000 in 2013.