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I have a $10,000 life insurance policy with a 3% interest rate. When I file my taxes do I claim the entire policy value or just the interest?

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  Answers  |  1

February 14, 2018

Interest and dividends earned on life insurance policies are not includable for tax purposes unless paid to a beneficiary and even then, the insurance carrier would send a form with the taxable portion delineated. If you are the beneficiary of the insurance policy and receive the proceeds as a death benefit, the face value of the policy, in your case $10,000, is not taxable income to you.

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