When a loved one dies, the last thing you want to think about is taxes. However, if you are the beneficiary of a life insurance policy, it’s likely you’ll want to know all the information about your death benefits, including if they are taxable. The good news is that life insurance death benefits are not taxable. So whether you choose to receive the death benefit all at once or over time, you won’t have to pay any taxes on it. However, it is important to note that although death benefits are not taxable, any interest that is earned on the death benefit is subject to tax. For example, if you choose not to have the benefit paid out immediately after the death, but instead ask the life insurance company to delay the transfer for a few months, you may have to pay taxes on the interest generated during that time. So if you choose to receive the benefit over time, make sure you keep track of the interest that accrues. To to clear up any questions or confusion you may have on life insurance death benefits, please speak to a trusted insurance agent so that they can inform you of your options and guide you through the process.

We’d be happy to review your insurance coverage options with you! Give us a call at 440-729-4042 or visit https://luczkowskiagency.com.