by YiLin Zhu on April. 17 2009Whether life insurance is taxable are many people’s concerns. The basic answer for this question is “NO”, the government cannot tax life insurance. However, it is possible that you will get your insurance states that the policy could lead into a taxable event. So the possibility of paying for life insurance policy is a question that could conceivably be answered in a number of ways.
When funds are received at the end result as originally intended by the policy, when the owner is deceased - the beneficiary will receive the full value of the policy completely duty free. When funds are obtained in the fashion it is not deemed as profiting by the government and therefore the sum, no matter how large or small in not chargeable.
As long as your policy is kept 'live' and active, the cash growth of the procedure is not taxable either. Not all life insurance policies experience enough cash growth beyond the original purchased value for this to be too much of a concern, but for those that do - any growth in cash value experienced over the life of the policy is safe from assessment as long as the procedure remains in good standing.
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