Are there income tax consequences for term life insurance when the term expires?

Question

Are there income tax consequences for term life insurance when the term expires?

Answer 1

No.

Answer 2

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Answer 3

Not at all. Your premiums went to pay for insurance only. With whole life you may have to worry about tax only if the amount in savings exceeds what you paid in as premium. After about fifteen years, what the company guarantees finally exceeds what you have put in as premium. Now, if you cancel the policy and they send money to you, any part of that money that EXCEEDS the total amount of premium is taxable. As long as the money is less than the premiums, there is no taxable event.

Answer 4

No - you just walk away.

Answer 5

Not for you. You insurance company will have to pay corporate taxes on the profits it made from you.

Answer 6

No. The only thing that could happen is if you want to keep that police after the term level premium expire, your premium will increase more than double.

Answer 7

No, as long as the insured has not died and whether or not the premiums were deducted as insurances expenses can be ignored unless audited.  CWW