Tax Treatment

Premiums are paid with after tax dollars—there is no deduction for premiums paid.

Earnings on a permanent life insurance policy’s cash value are not taxed as long as the policy remains in force. However, if a policyholder gives up his or her insurance protection, earnings in excess of the total premiums paid are subject to tax.

The beneficiaries of a life insurance policy are not obligated to pay federal taxes on the money they receive. Death benefits are free of federal taxes.

Publications and Resources

What You Should Know About Life Insurance. An ACLI guide to help you choose the right life insurance products to meet your needs.

Tips on Buying Life Insurance (PDF). Choosing a life insurance product is an important decision. As with any major purchase, it is important to understand your family's needs and the options available. Use this list of buying tips to help you choose.

State Insurance Department Directory. The State Insurance Department Directory, with contact information for 50 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands. Includes names and phone numbers for key personnel and specific subject contacts.