I am a 40 year old man on social security disability. I was the beneficiary on my father's life insurance policy. Do I have to pay taxes on it?
Tried to do a search but some funky error came up.
Sun Mar 06, 2011 4:34 pm
oldguy Senior Member
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No - it's tax free.
Sun Mar 06, 2011 5:35 pm
RichS Full Member
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I agree with oldguy. Life insurance proceeds received by a beneficiary on a life insurance policy are tax free...it is greatest benefit of an insurance policy because you get to keep ALL of the money so you can protect your life style.
Thu Mar 10, 2011 9:33 pm
sethm Member
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If you mean the death benefits of the insurance policy, then these funds are generally free from income tax to your named beneficiary or beneficiaries. Moreover, you may elect to have the insurance company hold on to these proceeds after your death and distribute them to your beneficiary at a later date or in a series of installments.
Tue May 15, 2012 4:40 pm
Boso Member
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I do not agree...
Sat May 19, 2012 8:03 am
annieyy New Member
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free??
Mon May 21, 2012 9:40 am
debedwards Preferred Member
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If it's a death benefit of an insurance policy then it is tax free. But there are cases that one should still pay for tax and that's when the policyholder transfer the ownership of life insurance policy to another party before death for monetary value or other consideration, the proceeds paid to the beneficiary at your death could be considered taxable income to that beneficiary. The help of a tax professional is needed here since this is a complicated matter.
Normally, at least on the state of Florida, your money can't be touched. There is no taxes that you have to pay.
Tue Jul 10, 2012 6:18 pm
online cpa New Poster
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Its the same in California for my tax clients as it is for Federal. Usually there are some differences but they agree on this point.
Fri Jul 27, 2012 2:09 am
viditagarwal Member
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A Relevant Life Policy is a very tax efficient way of ensuring that a persons are financially secure should the worst happen. Generally, a life insurance payout to your dependents won’t be taxed and can be paid as either a lump sum or income stream. Here you can read the guide about life insurance and taxes:
