Life Insurance Premium Tax Deductible

Is your life insurance premium tax deductible? Generally as an individual purchasing your own life insurance, the answer would be no. If your employer pay for your life insurance, is life insurance premium tax deductible then? The answer maybe yes in some situations. Here are some of the things you will need to clarify, to be sure if about the question is life insurance premium tax deductible?

If your life insurance policies are paid in full by your employer, then the individual payments are probably deductible from the corporation income. This does not include medical or dental expenses, being that life insurance premiums are not qualified as a medical expenditure. This is also why life insurance premiums are not allowed as deduction for individuals.

Are life insurance premium tax deductible if you are self employed? Unfortunately the answer is that they are not. If you are the owner of the company and you provide life insurance for a group of employees, these premiums maybe deductible. Still it would be wise to consult with an accountant to be sure that you file these premiums as deductions correctly.

Since no life insurance premiums are tax deductible as an individual holder of a policy, the payouts for life insurance are also non-taxable. The beneficiary designated for the insurance payout is not required to pay taxes on it. There maybe exceptions to this at a certain level of payout, but most individual payouts from a life insurance policy will not have to pay taxes on them.

So to answer the question are life insurance premium tax deductible? In most situations they are not, nor should you count on them being so. The best idea is to get the best deal on life insurance rates and make use of the benefits that it allows you.

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