Just in Time for Tax Season, Life Ant has Posted an Educational New Article about this Subject on their Website
Tax season is just around the corner, and around the country millions of people are organizing their paperwork, receipts and W2 forms.
The founders of Life Ant are well-aware of how quickly Monday, April 15 is approaching, as well as how many people may be wondering “Is life insurance taxable?” This inspired them to research and post a new article to their company website titled “Are Life Insurance Payouts Taxable?”
To check out the new article in its entirety and, if desired, also obtain life insurance quotes, please visit https://www.lifeant.com/are-life-insurance-payouts-taxable/.
As the article notes, life insurance payouts are usually not taxable—but this is not a hard and fast rule. In some instances, people will find that they are required to pay taxes on the proceeds.
“Generally, the payouts from a life insurance policy are not taxable. That means that the beneficiaries of your policy should be able to receive the full amount of the death benefit that your policy offers,” the article noted, adding that people should always check with their CPA or tax professional to double check their personal situation.
The new article then highlights four specific instances when life insurance benefits are not taxable—this includes when payouts go to beneficiaries, when payouts go to a spouse and when people remove cash from the policy as a loan.
As for when life insurance payouts are subject to a visit from the Tax Man, the article lists three specific examples where this could occur. The first is when there is interest on the payouts.
“If your beneficiaries decide to take the benefits of your policy in installments over a period of time instead of in one lump sum, your insurance provider will have to pay interest on the amount of the balance,” the article noted, adding that in this case, the interest that accumulates will be taxed.
“Certain states require that interest begins accruing immediately, or soon after death of the insured, even though the payout may take weeks to happen. This interest is taxable.”
About Life Ant:
Life Ant is a life insurance rate comparison engine based out of New York City. Since 2013, Life Ant has provided affordable life insurance to thousands of Americans. Please visit https://www.lifeant.com for a free life insurance quote today.