My sister took out a Cancer Insurance policy. has cancer, does she have to pay taxes on the money she receives

Question

My sister took out a Cancer Insurance policy. has cancer, does she have to pay taxes on the money she receives

Answer 1

if she dies from cancer ...no she does not have to pay taxes on that money untill the feds tap her on the sholder and demands payment. if she is in the grave tell her to keep her mouth shut!

Answer 2

Everything is taxable.....

Answer 3

Probably not.  A little bit trickier if done through a business and the payments were made with pretax money, but that is not usually the case.

Answer 4

It really all depends on how she was making her premium payments. Many times cancer policies are sold thru work.. AFLAC, Colonial, etc.. and paid for by deducting the cost off of the employees paycheck. If thats the case, and deductions were taken "pre-tax".. then chances are, the benefit will be taxable. If she purchased this on her own, or was paying with after-tax deductions, then no tax would be due.

Best thing for her, or you since you're helping out, call the insurance company. They should be able to advise you.

Answer 5

I think that the money that she will receive is going to be without the tax already...

Answer 6

Proceeds from insurance are not taxable.

This assumes it is really insurance and not some other financial device that the seller said was "just like insurance.".