When Is Life Insurance Included In Your Estate? 
When you are calculating the value of your estate , you only count the cash value of your life insurance policies as an asset . After your death , the death benefit left to your beneficiary will be counted as part of your estate for federal estate tax purposes . However , if the beneficiary is your spouse , your estate will pass to them tax free . If any of the life insurance proceeds are left when the spouse dies , that is when they will be included in the estate . Of course , it is important to talk to a tax attorney for specific situations and advice . This is general knowledge and may not be accurate for your specific situation . 