Are life insurance benefits taxable? The "interest build-up" portion of the annual increase in the policy's cash value is not taxed. Dividends generally are considered to be a "return of premium" and are not taxable. Although life insurance death proceeds will not typically be subject to income taxation, they may be subject to federal estate taxation. If you own part or all of the policy when you die, those can be included in your gross estate for federal estate tax purposes. State inheritance taxes and federal gift taxes may also apply to life insurance policies/proceeds under specific circumstances. Contact your tax adviser regarding questions about possible income, estate and gift tax consequences surrounding any life insurance you own or are contemplating buying.
Death benefits are usually not subject to federal income tax. There are exceptions, though, if the IRS deems your insurance policy to be an investment in disguise. Your insurance agent should be able to tell you if your policy benefits will be taxable.

[from insurance faq]

Visitor statistic (top 10 phrases from search engines for this page from last week):

lincoln national life insurance ; life insurance quote ; aviva life insurance ; life insurance comparison ; monumental life insurance company ;

cheapest life insurance ; aetna life insurance ; northwestern mutual life insurance ; sterling life insurance ; reliastar life insurance company ...