Are Life Insurance Proceeds Taxable In Delaware? 
No , Life Insurance proceeds are not taxable in Delaware for income tax , unless the proceeds exceed the face amount of the policy -LRB- the just the excess is taxed -RRB- , or if the proceeds are taken on a long term payment plan -LRB- then just the interest paid is taxed -RRB- . If the estate is higher than the exempted amount , life insurance can be charged estate tax . And if the proceeds go to the estate rather than a beneficiary who is a person , trust , or entity , they can be taxed . 