If an individual leaves life insurance proceeds to __________, then these proceeds will not be subject to taxation in their estate at the time of the individual's death.

Question

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If life insurance policy proceeds are left to a beneficiary other than the insured's spouse, then those proceeds will be taxed as part of the individual's estate when they die. However, if the individual leaves life insurance proceeds to their spouse, then these proceeds will not be subject to taxation in their estate at the time of the individual's death. However, when the surviving spouse passes away, there could be estate tax issues at that time.

If an Individual Leaves Life Insurance Proceeds to __________, Then