# Taxes on Life Insurance payment...
**URL:** https://boards.straightdope.com/t/taxes-on-life-insurance-payment/669490
**Category:** In My Humble Opinion
**Created:** [September 23, 2013, 2:45am UTC](https://boards.straightdope.com/t/taxes-on-life-insurance-payment/669490 "2013-09-23T02:45:16Z")
**Posts on this page:** 5
**Page:** 1
### Author:  [@JBDivmstr](https://boards.straightdope.com/u/JBDivmstr)
#### Post date: [September 23, 2013, 2:45am UTC](https://boards.straightdope.com/t/taxes-on-life-insurance-payment/669490/1 "2013-09-23T02:45:16Z")
**_Another_ question for the Doper accountants…**
I am the benificiary of some life insurance policies and I’m wondering what, if any, taxes I’ll have to pay when I collect.
Also, any advice on what would be the best method of investing the money. The amount will be in the neighborhood of $250,000, if that makes any difference.
---
### Author:  [@brickbacon](https://boards.straightdope.com/u/brickbacon)
#### Post date: [September 23, 2013, 4:09am UTC](https://boards.straightdope.com/t/taxes-on-life-insurance-payment/669490/2 "2013-09-23T04:09:50Z")
[How are life insurance policies taxed?](http://www.investopedia.com/ask/answers/09/life-insurance-tax.asp)
---
### Author:  [@DrDeth](https://boards.straightdope.com/u/DrDeth)
#### Post date: [September 23, 2013, 4:43am UTC](https://boards.straightdope.com/t/taxes-on-life-insurance-payment/669490/3 "2013-09-23T04:43:15Z")
Life Insurance is generally non-taxable.
_Life insurance proceeds, which were paid to you because of the insured person’s death, are generally not taxable unless the policy was turned over to you for a price._
[http://www.irs.gov/uac/Taxable-or-Non-Taxable-Income%3F-1](http://www.irs.gov/uac/Taxable-or-Non-Taxable-Income%3F-1)
Mind you, killing the person to collect can lead to other issues. 😛
---
### Author:  [@JBDivmstr](https://boards.straightdope.com/u/JBDivmstr)
#### Post date: [September 23, 2013, 6:35am UTC](https://boards.straightdope.com/t/taxes-on-life-insurance-payment/669490/4 "2013-09-23T06:35:25Z")
Thanks for the info! 🙂
---
### Author:  [@dracoi](https://boards.straightdope.com/u/dracoi)
#### Post date: [September 23, 2013, 5:11pm UTC](https://boards.straightdope.com/t/taxes-on-life-insurance-payment/669490/5 "2013-09-23T17:11:34Z")
Do be aware that life insurance payouts often include a taxable portion for interest. The bank calculates the time from the date of death (or date of the claim?) to the point where they actually cut the check. I’ve seen people earn as much as $1,500 of interest this way, though usually the amount is quite a bit smaller.