Term Life Premiums

[RobinBanks]

What is the name of your state? Tennessee


Are premiums paid for term life insurance tax deductible? This is an individual policy and not through my employer.

Thanks

[xylene]

Originally Posted by RobinBanks

Is the same true for term life insurance premiums?

That is going to depend on the EXACT details of your plan. It is POSSIBLE for life insurance to be paid from pre-tax (gross pay) dollars.

When I file my return for this year, can the life insurance premiums be deducted from my taxable income?

Again it is possible. THe exact details will depend on the specifics of your plan.

Something to consider, you may have tax due on payout, again depending on specifics and circumstances...

You need to review this matter carefully with your agent and/or carrier, and your HR manager if your insurance is thru work.

You may also want to review this and your overall tax situation with an qualified accountant and/or financial planner who is familiar with your current insurance and tax situation.

[RobinBanks]

Originally Posted by xylene

Something to consider, you may have tax due on payout, again depending on specifics and circumstances...

It's term life insurance so there is no cash value or payout unless, well...I die.
According to the salesman, if that happens, the beneficiary (my wife) recieves the full payout tax free.
The group health insurance is deducted from my gross pay. The term life policy is not through my employer BUT they do offer a Flex plan (pre-tax deductions that can be used for unspecified, uncovered medical and dental expenses AND term life premiums).
But something doesn't seem right about the Flex program which brought me to my original post.
Here's more information:
If I sign up fot it, I'll have $185 per month deducted from my gross pay for the Flex plan, plus $185 deducted automatically from my checking account for the insurance premium (Allstate insists on an automatic deduction). Them I have to apply for a reimbursement from the Flex plan administrator for the original $185. Seems like a lot of paperwork.
So my original question (asked a bit differently), is... do I need to go through the Flex Plan hoops to save a few bucks on taxes when I can just take a deduction on the premiums when I file my income tax return?

[Snipes5]

$185 a month for Term Life? Are you a 95 year old sword swallower or something? That is an awfully high payment.

Term Life premiums are not deductible on your tax return. So you will have to go through the paperwork to save the $$$ through your flex plan.

Snipes

[RobinBanks]

Not 95 years old...no.

I am 49 and my wife is 43 and the insurance covers both of us at $500,000 each for 20 years. I never needed life insurance until a year and a half ago we had daughter. That changed EVERYTHING.

[LdiJ]

Originally Posted by RobinBanks

Not 95 years old...no.

I am 49 and my wife is 43 and the insurance covers both of us at $500,000 each for 20 years. I never needed life insurance until a year and a half ago we had daughter. That changed EVERYTHING.

In that case the premium is quite reasonable. However, you may be getting too hung up on trying to save some tax dollars. I don't know what your marginal tax bracket is, but 185.00 a month isn't going to result in any particularly significant tax savings. You also need to make sure that your plan administrator is willing to cooperate with the reimbursement idea.