Is A Life Insurance Check Taxable?
4249 POINTSview profileGary LanePresident, Lane Independent Agency, Southern CaliforniaNO, NO AND NO! This is one of the major advantages of buying life insurance. The benefits paid are entirely tax free for virtually all insured in America. What better way to protect yourself, your family, and all those you love, than a tax free gift of life insurance money? Thank you. GARY LANE.Answered on May 24, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is an excellent question! The very nice answer is that the money paid from a life insurance company to the beneficiary is not subject to State or Federal Income taxes. It is not counted as taxable income on your taxes. It is basically free money, and that is one of the main reasons that people buy policies. Thanks for asking!Answered on May 27, 2014flag this answer
5877 POINTSview profileStan Cox IIInsurance Adviser - Broker, SC Insurance Services, Oahu, HawaiiWhether a "Life Insurance check" is taxable depends on what kind of life insurance check it is. You didn't say if it was the death benefit proceeds, or if it was a cash withdrawal from the policy, or if it was a loan against the cash value of the policy. The payment of the death benefit to the beneficiary is NOT taxable. A check for a LOAN against the cash value is NOT taxable. However if you surrender the policy for the cash value or if you do a partial surrender for cash, if you receive more money than you have paid in, (cash basis of the policy), then the amount in excess of premiums paid in WILL be taxable as ordinary income.Answered on July 9, 2015flag this answer
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