Are life insurance proceeds taxable when a family member was killed?

Are life insurance proceeds taxable when a family member was killed?

Life insurance death benefits are generally excluded from income under IRC § 101(a), separate from the personal injury exclusion. Wrongful death settlement proceeds from a civil lawsuit and life insurance proceeds are treated under different code sections but both are typically non-taxable to the recipient. For large estates—for example, following an 8-figure wrongful death verdict like those our firm has achieved—estate tax planning with a Georgia estate attorney is recommended.