No. of Recommendations: 0

It's the difference between income taxes and estate taxes...

It's true that the beneficiaries of insurance generally pay no income taxes on their inheritances. Of course, life insurance is not unique in that regard, in many cases, beneficiaries of any inheritance pay no income taxes on the inherited amounts. (There are exceptions, of course... Always exceptions. It's the tax code, after all.)

The deceased person's estate, however, may owe estate taxes on the insurance if the deceased 'owned' the insurance. See , or if you want to get detailed about it, see IRC §§ 2042 and 2035.

Print the post  


The Retire Early Home Page
Discussion on accelerating retirement day.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.