if i receive money from life ins policy, is it considered income?

Question

i am on ssi and section 8

Answer 1

Yes/No.

If you are talking about TERM life insurance then no the death benefit is not taxable. TERM life insurance is life insurance that does not build cash value and you have coverage each year you pay the premiun.

Whole/Universal and other life insurance that does have cash value is taxable but not entirely. The death benefit, that is the money your beneficiary would get if you died the day after you bought the life insurance, that amount is not taxable. However, as you get older and pay into the whole/universal life insurance, it builds cash value which may exceed the death benefit. Any amount over the death benefit IS taxable.

Any accountant or life insurance representative will tell you that.

For example if your father had TERM life insurance for $100,000 and he dies. The $100,000 is all yours - no taxes taken out.

If he had whole/universal life insurance with death benefit of $100,000 but since he's been putting money into it for many years and the value of that life insurance is now $150,000. Upon his death, you will get $150,000 but then have to report $50,000 as additional income if you get it all in one lump sum. There are distribution options for you. Look into it.

If the life insurance policy is yours (then it has to be whole/universal life) with a surrender value, then the situation becomes complicated. To avoid taxes altogether, call up the life insurance company and ask them for a loan using your life insurance as collateral. I think you can only borrow 80% of the surrender value. Even if it is a large sum, you will not be taxed on it. Then you can slowly pay it back and still keep your life insurance incase you pass away. When you do pass away, what you owe will be deducted before the rest of the money is distributed to your beneficiary.

If you have a house and a life insurance policy, you can do so much more...

You should contact a financial adviser with Vanguard or someone like that so you can invest the lump sum properly and have it generate supplemental income for you. There are many options available and you should take full advantage of YOUR money. And you should do everything you can to keep it yours and have it work for you.

Hey good luck.

Answer 2

Yes

Answer 3

Yes, it is, unfortunately. That can be credited to the Clinton years in the WhiteHouse - they said it must be taxed in order to make rich people pay. Of course, rich people don't have a problem paying, and the rest of us really need the money to be non-taxable, but there it is.

Answer 4

You mean as regards taxes? You don't have to pay tax on a life insurance death benefit.

If a life insurance death benefit is paid to you in a lump sum or other than at regular intervals, include it in your gross taxable income on your tax return only to the extent it is more than the amount of life insurance death benefit payable to you at the time of the insured person’s death.

In other words, if the life insurance death benefit is $50,000 and you receive $50,100 the $100.00 is taxable interest and you should include it on your tax return.

Answer 5

Some is some is not.

You did not say if it was because a person died or you cashed in your policy (I deducted that you are still alive).

Answer 6

Yes, it is but check with someone to see if you can deduct the cost of the funeral.

Answer 7

I think that it is, but to be on the safe side, check with a lawyer.

Answer 8

yes

Answer 9

yes. the irs shows no compassion.

Answer 10

I think it is ,