Life Insurance Proceeds

The beneficiary of a life insurance policy generally can receive the proceeds free from income tax. There is no requirement that the beneficiary be related to the insured (the person on whose life the insurance is based), and there is no limit on the amount of proceeds that can be received tax free.

Life insurance proceeds you receive on account of the death of the insured are tax free to you. There is no dollar limit on the amount you can receive tax free.