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Originally Posted by Sweepsplayer
Keep in mind also that life insurance proceeds are not taxable.
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Are you sure, Sweeps? If you own a policy ensuring someone else's life and you're the beneficiary, it's not taxable. If they own a policy ensuring their life, and you're the beneficiary, it is taxable like any other inheritance.
Married spouses who inherit do not have to pay inheritance taxes. Anyone else does.
My spouse and I are unmarried, and we didn't know when we bought our life insurance policies that we should each buy insurance on each other. So we each own our own insurance policies, and the proceeds will be taxable in the event that we need them. Of course, we hope never to need them, but still.
Just wanted to add that so people in our situation would know that your statement doesn't apply to them.
This also means if you both die and your kids are the secondary beneficiaries, they do have to pay taxes on the proceeds. So you may want to take that into consideration when deciding how much to buy.