Jonathan recently moved to Anchorage, Alaska. He is an avid fisherman
and outdoor fanatic. He is concerned about whether his life insurance benefits would be taxable.
Death benefits are usually not subject to federal income tax. Your insurance agent should be able to tell you if your policy benefits will be taxable or not. Give them a call to clarify your concern.
The best thing for you to do is make sure that you have your insurance policy payable to a specific beneficiary because it will pass quickly and directly to them outside of the estate and therefore will be exempt from federal and state income tax. If you leave it to your estate, there is no doubt that your beneficiary will have to pay federal, state, estate and inheritance tax.