What Is The General Rule For Taxation Of Personal Life Insurance? 
Life Insurance proceeds to the Beneficiary , are not taxed . The proceeds are part of the estate of the policy holder , and count against any limits that may be imposed on that now deceased policy holder . It is rare that the policy holder would have exceeded their estate tax limits , but if so , it is taxed against the estate . Again , the Beneficiary takes Tax Free . Gary Lane , Registered Representative , New York Life . 949 797 2424 . Thank you . 