Is Life Insurance Taxed At Death? 
The death benefit from a life insurance policy when paid to a beneficiary is not taxed . However when a person 's estate exceeds $ 5,2 million dollars in value there are estate taxes that are incurred . So in those cases the death benefit is added to the total of the value of the estate and therefore taxed . This is why many high net worth individuals will implement life insurance and assign it to a trust for the purpose of paying the estate taxes upon their death so their beneficiaries do n't have to deal with the harsh realities of having to come up with the money to pay those taxes . In many cases requiring that property be sold in order to cover them . 