Life insurance in Michigan is not charged income tax to the beneficiary, except when there is interest on the money (e.g. when the death benefit is not taken in a lump sum, but in regular payments, income tax is charged on just the interest), or some other anomalies. Federal Estate taxes will apply if the amount of the life insurance is over 5.25M and the spouse is no longer alive. Michigan does not have a state estate tax at this time.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
It's a fairly vague question so I would have to say that in the United States life insurance is not taxed in any state except under specific circumstances. If you own a life insurance policy and it has grown a cash value greater than the amount of premium you've paid into it, and you then surrender the policy and take the cash value, you may be taxed on the amount of gains over what you paid in premiums.
If you paid too much premiums into a cash value policy so that it becomes a modified endowment contract you will then be taxed on the gains that are earned. And there are a couple other instances where taxation may be incurred, but generally life insurance is not taxed.
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If you paid too much premiums into a cash value policy so that it becomes a modified endowment contract you will then be taxed on the gains that are earned. And there are a couple other instances where taxation may be incurred, but generally life insurance is not taxed.