Is A Lump Sum Life Insurance Payment Taxable? 
In most cases , no . Life insurance proceeds are normally received income tax free by the beneficiary . There are situations where the proceeds can be taxable such as with employer owned life insurance where certain requirements to make the proceeds non taxable are not met . Or in the case of policies that have three different parties to the contract - insured , owner and beneficiary are different - insurance proceeds might become taxable . 