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2011-09-04 22:13:16
2011-09-04 22:13:16

You may wish to contact an attorney on this issue and I am not an attorney. But here goes. If the proceeds from a life insurance policy were designated to an individual and this person had no liability for the debts then the money would not have to be used to pay debts that solely belonged to the deceased. If the beneficiary of the life insurance policy was the "Estate of Insured" then the debts of the insured would have to be paid from the policy proceeds.


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The answer to the question of whether or not beneficiaries have to pay taxes on the money received from life insurance policies is: no they will not have to.

Insurance money is paid when you make a valid claim against the policy and can prove why the situation falls under the terms of the policy---whether it is Life Insurance, Car Insurance, Accident Insurance, Travel Insurance, etc. Call the Insurance Company for exact details.

When an insured purchases an insurance policy they pay the insurance company money for the insurance coverage. This money the insurance company collects is called insurance "premiums". The insurance company, using the law of large numbers, collects more money in premiums than it pays out in claims. The insurance also makes alot of its money by taking the money earned from premiums and then investing it. As we all know that Life insurance policy cash values are accessed through withdrawals and policy loans. However, withdrawals are taxable to the extent they exceed basis in the policy. Loans outstanding at policy lapse or surrender before the insured's death will cause immediate taxation to the extent of gain in the policy and hence benefits the company.

You must direct your question to the insurance company that holds the policy.

The life insurance policy has a maturing date that determines the time it takes for a policy to accumulate the amount of money essential for the policy. An unmatured life insurance policy is one that hasn't yet reached the end of its policy.

The only case where the insured can collect on their life insurance is with a whole life policy. In that instance any interest or dividends are taxable.

Right now the only thing that you could be on the hook for would be unpaid tax debts, or unpaid private debts if sued. There is currently no estate tax. The money also is not held in probate or held up in court without injunction from a legal entity for criminal conduct or possible crime that caused the policy to pay. Basically, you get paid, fast, without anything being taken by the government. Life insurance proceeds do not count as income and are not taxable.

Life insurance is not considered part of an estate and is not available to pay the decedent's bills and debts. Even if there is no money whatsoever to pay bills, the insurance is not part of the estate. The only exception would be if there were no existing named beneficiaries or if the policy is payable to the estate. But even there, keep in mind that it isn't the "insurance" money that is now available to pay the debts. It is "estate" money, because the proceeds were payable to the estate. The Federal government will include life insurance proceeds as part of the gross estate for federal estate tax purposes, but that does not mean they are actually part of the estate.

Yes, you can out live your Insurance Policy. When the amount of the premium paid equals the face amount of the policy (the death benefit), the policy matures and you get all your money back.

I have a whole life insurance policy, how long does it take to cancel it, also can I get money back from it.

They do not have the money to pay back their debts!They do not have the money to pay back their debts!They do not have the money to pay back their debts!They do not have the money to pay back their debts!

The amount of money paid out will be listed in the policy itself. Read the contract to find this out.

This depends on the type of insurance money and who paid the premiums for the insurance for the insurance money that was received and what reason was the payments made. A LOT OF MISSING INFORMATION NOT INCLUDED IN THE ABOVE QUESTION.

It will state on the life insurance policy the name of the person or persons who are to receive the death benefit. Since a life insurance contract is a legal document, the insurance company is required to carry it out exactly as stated in the policy. The money may be argued over from that point, but the will cannot dictate where the money from a life insurance policy goes.

Not only money received but also debts forgiven from credit cards, car loans, etc. Any and all debts forgiven or wiped away through bankruptcy courts are taxable as income.

George Bailey has a life insurance policy worth $5,000.

A will does not normally change a life insurance policy. The policy is a contract between the insured to pay a beneficiary. If the policy leaves the money to the estate, the will then controls the dispensation.

Why in the world would anyone want to pay that much money for an insurance policy if they did not know the person? Life insurance is expensive.

The cash value is the amount of money your insurance policy is worth to the owner of the policy if the insurance is cancelled and the policy terminated. The insurance company will mail a check to the to the policy owner upon policy termination or cancellation by request of the owner. I would strongly encourage you to consult a professional in your area before cancelling an existing policy. There may be other options and alternatives to access the value of the policy without cancelling the insurance policy.

You can get money from life insurance in the form of maturity benefit and death benefit (the later being paid to the nominee).

"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.

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