This is a very broad question. If you mean Death Benefit Payments, then they are usually tax free.
If you are supposed to be taxed, then the Insurance Company will send you a 1099 to include with your taxes and regular W2. If you have not received a 1099 then you should owe no tax. If you have received a 1099 give it to your accountant or enter it into your tax software.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Where does life insurance go on a tax return? Usually it doesn't. Premiums are usually paid with after tax dollars and gains if you have a cash value policy aren't put on a tax return either, unless you've set up your policy in such a way that would make those gains taxable. Most people for obvious reasons, don't set their policies up that way.
Enrolled Agent-licensed to practice before the IRS, Samuel N Smith, EA, South Carolina
From your question I cannot tell if you are asking the question because you own a life insurance policy and you have been sent a DIV B by the insurance company or if you are asking because you inherited the death benefit from a life insruance policy.
If you are receiving a DIV B from the insurance company you have probably been paid a dividend by the insurance company that you chose to receive as cash rather than re-investing the dividend.
Life Insurance death benefits are paid under "contract law". Therefore if you receive a settlement from a life insurance benefit as the beneficiary of that policy then the proceeds are not taxable.
However, what happens if the proceeds are invested in certificate of deposits at the bank and now the bank is going to send you a 1099B each year-those interest amounts are taxable
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If you are supposed to be taxed, then the Insurance Company will send you a 1099 to include with your taxes and regular W2. If you have not received a 1099 then you should owe no tax. If you have received a 1099 give it to your accountant or enter it into your tax software.
If you are receiving a DIV B from the insurance company you have probably been paid a dividend by the insurance company that you chose to receive as cash rather than re-investing the dividend.
Life Insurance death benefits are paid under "contract law". Therefore if you receive a settlement from a life insurance benefit as the beneficiary of that policy then the proceeds are not taxable.
However, what happens if the proceeds are invested in certificate of deposits at the bank and now the bank is going to send you a 1099B each year-those interest amounts are taxable