How Much Is Taxed On Life Insurance? 
Zero . Nada . Nothing of the beneficiary payment is taxable . That is a great advantage for life insurance . You can be sure that everything your carrier will pay will be kept by your beneficiary . If , however , you decide to cancel your life insurance and `` cash it in '' , the proceeds to you over the cost will be taxed as income . Do not cancel your policy . You can borrow against permanent life and keep that loan money tax free . Just do not cancel your policy if you want to avoid taxes ! Thank you . GARY LANE . 