by Guest » Sat Nov 03, 2007 01:05 am
If a life insurance policy premiums are paid with pretax dollars (as in a 125 plan) I am pretty sure that the death benefit would be taxable.
I'm not sure how its taxable though.
Would it be taxed as ordinary income for the beneficiary?
or
Would it be taxed based on the amount that is an excess of premium paid?
I'm not sure how its taxable though.
Would it be taxed as ordinary income for the beneficiary?
or
Would it be taxed based on the amount that is an excess of premium paid?
Posted: Sat Nov 03, 2007 11:11 am Post Subject:
Hi Derek, tax will be levied on the life insurance benefits as per the IRS norms. But paying the premium with pretax dollars qualifies you for the immediate tax waivers.
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