Why Is Life Insurance A Taxable Benefit? 
The Great News is that Life Insurance Beneficiaries do NOT have to pay taxes on payments to them . Employees who receive Life Insurance provided by an employer are , however , receiving a benefit paid by that employer . You are liable for the taxes for the value of that benefit . Be happy though , that the payment on that policy will be absolutely tax free to the beneficiary . Gary Lane , Registered Representative , New York Life , 949 797 2424 . Thank you . 