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QUESTION DETAIL
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Many employers provide life insurance to their employees. These types of policies often provide the opportunity for the employee to pay for additional coverage. If the employee opts to not increase the coverage and that same employee dies, are the proceeds tax-free?
ANSWER
The BIDaWIZ Team's Answer:
Per Internal Revenue Code Section 101, the proceeds received by the estate and/or beneficiaries as a result of the death of the insured is tax-free. This is the case no matter if the payment is made to the insured's estate or to any other beneficiary or trust.
