are paid up insurance proceeds paid to the living person insured taxable
the insurance company pays the insured the cash value that has accumulated in the policy.............
No. Life insurance benefits are not eligable for taxation unless the insured passed away without assigning a beneficiary. In this situation the benefits are paid into the deceased's estate and are subject to any back taxes or child support owed by the deceased, or the would be inheritor. Cash value is not the same as an insurance benefit and may be taxable in some situations. Group (employment) insurance has no cash value.
That depends on whether or not you wish to continue having the life insurance in force at the insured's death. If you wish to have the life insurance in force at death, then it is best to borrow some of the cash value. If you surrender the policy, then you receive all the remaining cash value (less any surrender charges), but the death benefit is no longer there. Also the cash value received MAY be taxable.
You are talking about Paid up additions. No they are not. Proceeds in cash value are not taxable as long as the cash value does not exceed the amount of premiums paid.
As a general rule, life insurance proceeds from any type of policy are not taxable to the beneficiary. In addition, any loans from cash value are not taxable unless the policy lapses.
term insurance...
Term life insurance does not build a cash value. It simply covers the insured person for a certain term or period of time.
Limited payment life insurance
the insurance company pays the insured the cash value that has accumulated in the policy.............
term insurance...
no there is no cash value in a term insurance policy
No. Life insurance benefits are not eligable for taxation unless the insured passed away without assigning a beneficiary. In this situation the benefits are paid into the deceased's estate and are subject to any back taxes or child support owed by the deceased, or the would be inheritor. Cash value is not the same as an insurance benefit and may be taxable in some situations. Group (employment) insurance has no cash value.
That depends on whether or not you wish to continue having the life insurance in force at the insured's death. If you wish to have the life insurance in force at death, then it is best to borrow some of the cash value. If you surrender the policy, then you receive all the remaining cash value (less any surrender charges), but the death benefit is no longer there. Also the cash value received MAY be taxable.
"Insurance and Taxes. No. All proceeds or withdrawals from any insurance policy are not taxable." This is not true. If you cancel a life insurance policy, the growth on the cash value IS TAXABLE. If you do not surrender your policy, the money is taken as a loan and therefore not taxable, but interest that has to be paid back to the insurance company grows.
Pure term life insurance. In this kind of policy, there is no cash value of the policy for the insured. The policy holder gets no tangible or monetary benefits as long as he/she is alive. Only the survivors of the insured can reap the benefits of this kind of policy. So, we can say that this type of policy has no cash value for the insured individual.
You are talking about Paid up additions. No they are not. Proceeds in cash value are not taxable as long as the cash value does not exceed the amount of premiums paid.
As a general rule, life insurance proceeds from any type of policy are not taxable to the beneficiary. In addition, any loans from cash value are not taxable unless the policy lapses.