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Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received.

Is Cash Surrender Value Taxable? Generally, the cash surrender value you receive is tax-free. This is the case, because it's a tax-fee return of the principal of the premiums you paid.

Depending on the insurer, a life insurance payout can typically be distributed in three ways: in the form of a lump sum, via a life insurance annuity, or through a retained asset account.

It can take up to a year for a retirement fund death benefit to be paid out, as the trustees must ensure that all financial dependents are provided for.

In most cases, you can get a lump-sum death payment if you were living in the same household when your spouse died. If you were living apart, you may still qualify for the lump sum death payment if, during the month they died, you met one of the conditions below: You were already getting benefits on their record.

A death benefit is a payout to the beneficiary of a life insurance policy, annuity, or pension when the insured person or annuitant dies. Beneficiaries must submit proof of death and proof of the deceased's coverage to the insurer to receive the benefit.