Is Life Insurance Taxable To The Beneficiary In Michigan? 
Life insurance is generally not taxable to the beneficiary in Michigan or in any other state . Life insurance is passed to the beneficiary income tax free when the beneficiary is a person . If there is interest earned on the proceeds due to taking them in installments rather than a lump sum , the interest on the proceeds are taxable , but not the life insurance benefit . If the amount of the estate is over $ 5,250,000 in 2013 , estate taxes may be charged ; contact a tax attorney if this is your situation . 