The Truth Hub
Honest answers to the most common questions about insurance, taxes, and protecting your legacy.
🏛️ The Tax Vault
Are life insurance proceeds/benefits/payouts taxable?
Answer: Generally No. Death benefits are income-tax-free to beneficiaries. Only the interest earned on a delayed payout is taxable.
Are life insurance premiums or payments tax deductible?
Answer: For individuals, no. For business owners, they may be deductible if the policy is part of a qualified group-term benefit plan.
Are life insurance dividends taxable?
Answer: Usually No. Dividends are considered a return of your premium, not income, unless they exceed the total amount you've paid in.
🛡️ Legal & Asset Protection
Can a minor be a life insurance beneficiary?
The Reality: Yes, but insurance companies cannot legally pay a minor. The money will be held by a court. Solution: Name a Trust as the beneficiary.
Can life insurance be a business expense?
Answer: Yes, specifically for "Key Person" insurance or executive bonus plans (Section 162).
📈 Annuities vs. Investments
Life Insurance vs. Annuity: Which is for me?
Life Insurance: Protects your family if you die too soon. Annuity: Protects you if you live a very long time by providing guaranteed income.
Is Life Insurance like a savings account?
Answer: Permanent policies (Whole/Universal) act like a tax-advantaged savings account, but with the added "death benefit" safety net.