Inclusion of Life Insurance Proceeds in Estates
The Inclusion of Life Insurance Proceeds in Estates refers to the requirement that the death benefit paid out from a life insurance policy is included in the gross estate of the deceased for estate tax purposes. This inclusion applies if the deceased was the owner of the policy or if the deceased had certain rights over the policy at the time of death.
For example, if an individual owns a life insurance policy and passes away, the proceeds received by the beneficiaries will be considered part of the individual’s estate. This may increase the overall value of the estate and could subject it to estate taxes, depending on the total value of the estate and applicable tax thresholds. If the policy was owned by someone else and the deceased had no control over it, the proceeds may not be included in the estate.
« Back to Glossary Index