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Some 4 per cent of families pay inheritance tax, but receipts have soared because frozen thresholds and the property price boom are catching more bereaved people in the net - see the box on the right.
Example: Imagine you have a $500,000 permanent life insurance policy, and you borrow $10,000 to cover a medical expense. If you repay this $10,000 loan, along with any interest, your policy’s ...
One of the common questions surrounding life insurance is whether beneficiaries have to pay taxes on the death benefit they receive. In general, life insurance proceeds are not subject to income tax.
If your estate is the beneficiary of your life insurance policy, the death benefit may be subject to estate taxes. In 2024, the federal estate tax ranges from 18% to 40%, depending on how much of ...
Any payout is also protected from estate taxes, even if the insured's estate and death benefit exceed the exemption. (Currently, a 40% federal estate tax applies to estates exceeding $13.61 million).
Since the money is in a life insurance policy, any money made by the investors isn’t taxable, since the IRS typically can’t tax either income within insurance policies or life insurance payouts.
Your life insurance policy may deny your death benefit by excluding specific activities or situations, such as suicide, ...
Taxes: When a beneficiary receives a life insurance payout, they don’t need to pay taxes, while disability insurance payouts depend on what the policyholder uses to pay their premiums.
The IRS disagreed – it reasoned that the $3 million payout should be included in Crown's valuation when calculating Michael's estate tax, even considering the obligation to redeem the shares.
Let's explore whole life insurance, including what it is, how it works, how much it costs and how it compares to term life coverage. That way, you can decide which policy might be right for you.