Comments on: I have term life insurance through my job and i want to know does govt. take out taxes on life ins. policies?

By: mercedes

mercedes — Fri, 18 Dec 2009 22:44:46 +0000

If you die, your beneficiaries get the money tax free. Have a nice day.

By: Bash Limpbutt's Oozing Cyst©

Bash Limpbutt's Oozing Cyst© — Fri, 18 Dec 2009 22:44:46 +0000

No, life insurance proceeds paid upon the death of the insured are not taxable income to the beneficiary.

If the beneficiary is also the owner of a whole life policy some of the proceeds may be taxable but that would not be an issue with a term policy.

By: jack bauer

jack bauer — Fri, 18 Dec 2009 22:44:46 +0000

life insurance proceeds are not taxable to the recipient.

By: sbinlb

sbinlb — Fri, 18 Dec 2009 22:44:46 +0000

No, the life insurance is paid out when you die, tax free.
Depending on how much the insurance if for you could be paying taxes on the benefit now.

The IRS allows you to have $50000 worth of life insurance tax free. Any amount over that the company considers the premium a taxable benefit. There is a specific formula that changes annually so I don’t know the exact number off the top of my head but for every $1000 worth of coverage over $50000 you are charged something like 27-cents. This is considered income (non-cash) and you pay regular income tax and FICA taxes on this money.

By: Judy

Judy — Fri, 18 Dec 2009 22:44:46 +0000

Once you get above a certain amount of company paid life insurance policy, the premium for any excess is a taxable benefit.

The payout to beneficiaries when the insured dies is tax free.