How Much Is Taxed On Life Insurance? 
In almost every case the death benefit is not subject to income tax as long as it is left to a beneficiary . If the beneficiary is the estate it will force the proceeds into probate and it will be taxed as an asset with the rest of the estate . This is a costly mistake . As far as cash value life insurance values . The money paid into the plan premiums is not subject to income tax as it was paid with post tax dollars . If the policy is surrendered or cancelled the gains would be taxed as income . If you leave the policy in force and simply borrow against the value versus surrendering , then all of that money is tax free . I recommend sitting down with a trusted advisor to avoid costly mistakes to yourself and your loved ones . 