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.


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