Is Life Insurance Settlement Taxable Income? 
When you are the beneficiary of a life insurance settlement , it is usually not taxable income . If the insurance settlement was left to the estate of the Insured , it is subject to income tax . And either way , if the amount pushes the value of the estate over the exempted amount , estate taxes will need to be paid on the amount above the exempted amount -LRB- federal estate tax is charged on estates over 5.25 . M in 2013 -RRB- . 