Does The Irs Take Money From Life Insurance?
11498 POINTSview profileJason GoldenzweigCo-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, NevadaLife insurance proceeds are income tax free meaning the IRS cannot take money out of the death benefit paid out to the beneficiary. There are situations where the value of the death benefit can be included in the calculations of the estate for estate tax purposes. People generally use life insurance trusts when setting up the policy for estate planning purposes.Answered on April 28, 2014flag this answer
10968 POINTSview profileTim WilhoitOwner, Your Friend 4 Life, Brentwood TNIn general life insurance proceeds are income tax free when left to a beneficiary. Avoid naming your estate as the beneficiary unless you have a trust in place. Life insurance proceeds can be taxed if left to an estate without a trust. I highly recommend using an experienced agent or advisor to avoid costly mistakes to your beneficiaries in the future.Answered on April 28, 2014flag this answer
14231 POINTSview profileTom SheehanAgency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482In general, life insurance proceeds paid directly to your named beneficiary are not taxable nor are they attachable by creditors. Assuming your beneficiary invests the proceeds, then any interest or income that is drived from that investment will then, of course, be taxable and the responsibility of your beneficiary.Answered on April 28, 2014flag this answer
Did you find these answers helpful?
Yes
No
Go!
Add Your Answer To This Question
You must be logged in to add your answer.
.JPG){kind=avatar}
