Life
Questions and answers
Living Benefits payments received on or after January 1, 1997, are not subject to Federal income tax. However, some states have laws, regulations, or rulings concerning the taxability of Living Benefits (also called accelerated death benefits). You should consult a tax advisor or your State's tax department for specific information concerning State income tax laws.
Qualified payments from viatical settlement firms received on or after January 1, 1997 are also not subject to Federal income tax provided the companies meet certain tax exemption qualifications.
If you are considering assigning your insurance to a viatical settlement firm, you should consult a tax advisor to determine if you and the viatical settlement firm meet the tax exemption qualification standards.