life insurance how much does one person need??

[sweeps]

Re: life insurance how much does one person need??

I've been burned before on life insurance questions, so anything is possible. But according to the IRS:

Generally, if you receive the proceeds under a life insurance contract because of the death of the insured person the benefits are not taxable income and do not have to be reported.

Frequently asked question 4.9
Tax Topic 422

[TBH]

Re: life insurance how much does one person need??

Wow, I should find out for sure about this. But I do know as unmarried folks we need extra life insurance because I'd have to pay taxes on all his assets, including his half of our jointly-owned house and his half of our joint bank accounts.

Before anybody asks, yes, we would get married if it was only a financial consideration. But we have ethical reasons for staying unmarried, and for not taking advantage of the fact that we live in a common law state. We would be common law married by now except that we're unwilling to be legally married at all. But this is too OT for this forum.

[sweeps]

Re: life insurance how much does one person need??

Best to consult an estate planner and/or lawyer. I probably shouldn't have even commented on this topic because there are so many different laws, loopholes and exceptions that making general comments about life insurance and estate planning is almost useless.

What state you're in, the size and type of assets in your estate, your marital status, your beneficiaries' needs, the current (and future expected) state of tax laws, and the creativity of the estate professional you're working with are all factors in making estate planning decisions.

[sweeps]

Re: life insurance how much does one person need??

By the way, I think we're both right. Generally speaking, beneficiaries do not pay income taxes, but they may have to pay estate taxes. Source

But again, an estate planning professional should be called in if you have a sizeable estate. This stuff can become very complex very quickly.

[rob62521]

Re: life insurance how much does one person need??

This is a good question because my mom died Thursday. She did not have enough insurance to cover her funeral costs and we did not pick out anything expensive. We are doing barebones. I'm currently trying to sell furniture and some of her dishware to cover the rest. Four years ago when my mother-in-law passed on, we made the arrangements and they said to pay when we could. Now the funerals homes are asking for the money before or the day of the service. I assume that's because they've been stiffed too many times.

[greedy4chips]

Re: life insurance how much does one person need??

rob62521,
Sorry for your loss!

No puns intended I am sure...

...We are doing barebones...they've been stiffed too many times.

Sorry, but those just seemed too obvious to ignore!

[rob62521]

Re: life insurance how much does one person need??

Thanks, greedy4chips for your condolences.

I didn't think about the barebones and stiffed comment. When I went out to buy clothes, I picked up a blouse and offhandly said, "she wouldn't be caught dead in this." It then dawned on me what I had just said.