Asked anonymously

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?

Report Question Report

  Leave Answer

Sign in to MoneyTips
By submitting you agree to our Terms of Service

  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.

$commenter.renderDisplayableName() | 09.27.20 @ 16:29