Is Life Insurance Tax Deductible?
MoneyGeek.com May 19, 2023
Eric Chaimowitz Quoted
“Are there any strategies or techniques an individual can utilize in order to maximize their potential tax deductions related to life insurance?
Generally, life insurance premiums are not deductible for individuals, and proceeds from life insurance policies are not taxable. With that said, for an individual that could potentially have a taxable estate, there could be some tax planning opportunities to save on the estate tax by using an irrevocable life insurance trust, or ILIT. In the case of an ILIT, the trust would own the life insurance policy and pay the premiums. With an ILIT, the tax-free proceeds from the life insurance policy would be paid to the trust and be outside of the taxpayer’s estate.”
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