Face The World

1. 
   Vanessa Hudgens said:
   February 1st, 2010 on 1:05 am

   Best Answer – Chosen by Voters Life insurance pay-out on a spouse is not taxed. Source(s): My husband died recently.

2. 
   miley cyrus said:
   February 1st, 2010 on 1:05 am

   I may not be of much help. Me and my husband are in the process of possibly obtaining a whole-life cash value plan (or something like that). Anyways I do remember them telling us that the cash accumulation payout from it (its like a forced savings AND a life insurance policy) or if we every cashed out the money is completely tax-free. So I think that the actual life insurance payout would also be tax free. However, I am no expert and that might be for this plan, as I don't know what plan your employee had. Hope someone comes along with a bit more knowledge than me.

3. 
   taylor swift said:
   February 1st, 2010 on 1:05 am

   Just like every tax question, it depends.Generally though, the amount received will be tax-free. Source(s): http://www.irs.gov/faqs/faq-kw95.html

4. 
   Vanessa Hudgens said:
   February 1st, 2010 on 1:05 am

   Life insurance proceeds are not taxable. Nor are they part of the deceased's estate. So they don't even show up on the tax return.

5. 
   miley cyrus said:
   February 1st, 2010 on 1:05 am

   Generally it's tax free.

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