In part 3 of our life insurance questions, we look at the types of policies and if tax is applicable.
What are the different life insurance policies? Which should I get?
Term insurance: Only applies for a period of time and typically get for an immediate need. These policies only pay out 2% of the time
Permanent insurance: Applies until you pass away. Two types, whole-life and universal-life, where the investment portion is either invested the say way for each policy holder or has options for how it is invested, respectively
To decide what’s best for you it’s best to work with a life insurance provider
Do I pay taxes on payments from an insurance policy?
The death benefit is tax free, meaning the beneficiary does not pay taxes on the money received