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Life insurance death benefit

Also called: term life, permanent life

A payment to your beneficiary when you die. It is generally free of federal income tax. Term policies cover a fixed period; permanent policies last for life.

In RetIQ, premiums are added to expenses while a policy is active and the death benefit is added to the plan's brokerage in the year of death. The model assumes the surviving spouse receives it first; if both spouses die, it becomes part of the estate. RetIQ does not model a named beneficiary or policy ownership (for example, an ILIT).

Sources

Internal Revenue Code — IRC §101(a)
The current-year figures and the numbers from your own plan appear inside RetIQ. Open the app →

Related

estate-taxsurvivor-benefit

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