Taxation of life insurance and annuities
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In a group life policy with a death benefit of more than $50,000,
the premium cost for insurance above $50,000 is taxable as income to the insured.
Annuity death benefits
Are not tax deductible or tax free.
Life insurance death benefits
are tax free
Group life insurance does not exclude
does not exclude accidental death.
A modified endowment contract
has a 10% IRS early withdrawal penalty.