In this lesson, we'll discuss the exclusion of some life-insurance and similar payments from gross income.

Life-Insurance Policies Generally

A life-insurance policy is a contract between the insurer and the policy owner. In a basic term policy, the owner makes premium payments to the insurer for the policy's duration. If a specified person called the insured dies while the policy is in effect, the insurer makes a cash payment, called a death benefit, to a beneficiary. More complex policies...