Should Life Insurance be tax?
please add why or why not
Life insurance is taxed. It's collected next to the premium.
Why did someone give me 2 "thumbs down"? I am right in my answer - I know because I trade it for a living.
Poor Robbie keeps getting the thumbs down.
He's correct, a few states charge premium excise to the consumer at sale (like KY), most insurers pay premium levy as a back office function and turn it over it to the states it be collected in. Every state get a piece of the insurance premium pie.
Since it's the states commission to regulate the insurers, I'm OK with that as long as they make it a small piece so it's not an release burden to the policyholders or try to balance the states budget with premium levy like Florida.
Now if the question is really give or take a few should death benefits be taxed, later I'd say no: the premiums were salaried with after tax money, the passing benefit shouldn't be taxed. Having a tax free release benefit adds to the public good and encourage purchasing of life insurance.
OH, sheesh. Just what we need, another tax to provide the politicians more money to vote themselves more benefits.
No. Taxes are high enough.
Answers: The taxes are included in the premium. Therefore, contained by most situations, the payout is not taxed.
It all depends on the type of duration policy, how much it was funded, and how the beneficiary plans on taking the money out.