Facts of Life Insurance – Taxable Life Insurance

In most circumstances life insurance isn’t taxable.  Here are some instances when it is and how to avoid them.

1. Businesses writing off the premium costs on their taxes.  Can be prevalent with key person policies.

2. Unholy Trinity – Owner, Insured, and Beneficiary are all different.  It creates a gift from the owner to the insured

3. Tax Code Section 101J – For business policies after 2006 a disclosure form should be completed.

4. Estate Taxes – If policies are individually owned and not trust owned then the benefit is subject to estate taxes beyond the exemption level.

5. Policies held in a non-qualified retirement plan.

Enjoy our video…

Taxable Life Insurance

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Brevity & Associates

Brevity & Associates