Insurance Benefits Taxable to Adult Children

Q. Are life insurance benefits taxable to adult children?

A. Overall, the face amount of a life insurance death benefit is not subject to federal income taxes by the recipient. This is true regardless of whether the recipient is an adult child of the insured or anyone else. However, these benefits could be subject to estate tax or inheritance tax, depending upon where the recipient lives, as well as on the size of the decedent’s estate.


Susan Wright holds a BA from Michigan State University and an MBA from St. Louis University. Having over 20 years of working experience in the insurance and financial services industry, she has trained more than 10,000 financial services representatives. Susan has had licenses in real estate, insurance, and NASD Securities, and she has earned nine industry professional designations, including CLU, ChFC, RHU, REBC, CSA, CLTC, CCFC, CSS, and ADPA. Read more about her on Google+

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