Is My Life Insurance Taxable? 
Life insurance is not taxable for income tax in most situations . A Term life insurance death benefit that is paid to a beneficiary in a lump sum , and does not put the estate over 5.25 M , would not incur estate or income taxes . If there is some interest earned on the death benefit due to being paid in installments , if the owner of the policy transferred the policy ownership to someone else before death , if the estate is over the exempted limit , or if the beneficiary of the policy is the estate , then there may be some taxes charged . Contact a tax attorney for specific situations . 