High Point, North Carolina
1004 N Main St Ste 101
High Point, NC 27262
(336) 884-5636

3 Times Life Insurance Plan Benefits May Be Taxed February 28, 2018

High Point, Guilford
3 Times Life Insurance Plan Benefits May Be Taxed, High Point, North Carolina

Life insurance plans are an excellent way to ensure your spouse and children are provided for upon your passing. Many people worry that the proceeds their plan pays out are taxable, but this is not always an issue. There are a few unique circumstances when your beneficiaries would have to pay taxes on these payments. 

When Are Life Insurance Plan Benefits Taxable?

1. Your Spouse Isn’t a U.S. Citizen

Thanks to the Unified Gift & Estate Tax marital deduction, you can transfer your wealth to your spouse tax-free. This benefit only applies, however, if your spouse is a U.S. citizen. If they aren’t a citizen, then they face estate taxes in accordance with the Personal Estate Tax Exemption rules. 

2. The Total Value of Your Estate Exceeds the Federal Tax Threshold

life insurance planWith the recent passing of the Tax Cuts and Jobs Act, the federal estate tax threshold was raised to $11.2 million per person. This means you can leave your spouse, children, or any other beneficiary up to that amount without them having to face estate taxes. If the value of your life insurance plan combined with other assets exceeds that amount, then your beneficiaries will have to pay taxes.

3. Your State Has an Estate Tax

Several states also impose estate taxes. Many use the same $11.2 million threshold imposed at the federal level, but some have much lower limits. Vermont, for example, taxes estates valued at $2.75 million or more. In North Carolina, however, there are no estate taxes on owned or inherited property.


Whether you’re looking into life insurance plans for the first time or you need to make changes to an existing policy, working with a qualified insurance agency is key. For more than 20 years, Dewey Beckner of Allstate Insurance Companies has helped High Point, NC, residents navigate the world of insurance. He offers a variety of insurance products to meet all your needs, including homeowners, renters, and car insurance, in addition to life and term-life insurance. Request a no-obligation insurance quote online or call (336) 884-5636.

Other Announcements, Events and Deals from Dewey Beckner: Allstate Insurance
Why Do You Need Renters Insurance?, High Point, North Carolina
Over one-quarter of people in the United States are tenants in rental properties. In the event of theft or a natural disaster, it’s important that you have coverage for lost or damag...read more
A Guide to Condo Insurance, High Point, North Carolina
You may believe that you don’t need insurance for your condo. After all, it’s likely that the owner of the building or the condo association has coverage for the building itself. How...read more
What Does Boat Insurance Cover?, High Point, North Carolina
While many own boats primarily for recreational purposes, these vehicles are still quite costly. As crafts that spend a lot of time on the water, they can face a lot of unique risks—...read more
What Does It Mean to Be a High Risk Driver?, High Point, North Carolina
Being considered a high-risk driver will have an impact on your car insurance rates, which is why it’s important for motorists to understand this designation. A person may be la...read more
What to Consider Before Bundling Your Home & Auto Insurance , High Point, North Carolina
The majority of insurance companies offer consumers various opportunities to lower their policy premiums. One of the most popular ways to save money is by bundling home and auto insu...read more