Does A Life Insurance Policy Become Part Of An Estate? 
If the beneficiary of a life insurance policy is a person , the proceeds are paid directly to the beneficiary . If the beneficiary of the policy is the estate , then the death benefit does go into the estate to be distributed according to the will . However , life insurance proceeds are subject to estate taxes whether or not the beneficiary is a person or the estate . If the value of the life insurance benefit plus the value of the estate exceed the $ 5.25 million exemption per person -LRB- in 2013 -RRB- , then putting the life insurance policy in an irrevocable trust may be a good idea . Talk to you tax adviser and a knowledgeable life insurance agent to make an informed decision . 