Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure
Apply for term life insurance online without the medical exam. Get an instant decision and adjust your coverage at no charge.
This article was reviewed by Andrew Flueckiger, a member of the Finder Editorial Review Board and certified insurance counselor and licensed insurance agent in five states.
Unfortunately, life insurance premiums paid by individuals are not tax-deductible. Unlike IRAs and similar retirement savings accounts, life insurance policies are considered personal expenses — so they’re not eligible for tax deductions.
Many people believe life insurance can be written off as a business expense, but that’s not the case. The Internal Revenue Service (IRS) doesn’t view life insurance as a necessary business cost, so you won’t be able to deduct any premiums you paid for coverage. That being said, your premiums may be tax-deductible if you’re using life insurance as a way to protect your business assets, like an office space or other capital.
While the IRS allows LLCs to deduct most of the insurance premiums associated with business expenses, life insurance premiums are not eligible. However, if you’re the owner of an LLC and are paying life insurance premiums for your employees, these premiums may be deductible.
Keep in mind that this doesn’t apply if the business owner or LLC itself stands to benefit in any way from the coverage. For example, if your husband works for your business and you’re listed as a beneficiary on his employee life insurance policy, those premiums are not tax-deductible.
Life insurance premiums are only deductible if the corporation is providing life insurance as an employee benefit. The employee will not be taxed on these premiums, as they should be excluded from the wages section on the employee’s W-2. However, there are two exceptions:
If the corporation is a beneficiary or receives compensation when the employee dies, the premiums are not deductible. This includes corporate-owned life insurance policies taken out on behalf of employees. Though this type of insurance can provide protection against the loss of a key employee, monthly premiums are not tax-deductible.
Unlike health insurance premiums, life insurance premiums are generally not tax-deductible for sole proprietors. Sole proprietors are treated just like S-corps in that premiums are only deductible if the corporation and owner aren’t beneficiaries under the contract.
While you may not be able to write off your life insurance premiums, you’ll still score several tax benefits:
For the most part, life insurance premiums are not tax-deductible, but there are a few exemptions. If you’re an individual or a business owner, it’s worth consulting a licensed accountant for any tax-related questions, as they can offer the most accurate advice based on your situation.
When you’re ready to purchase a policy, compare life insurance providers to get the best possible deal.
A final expense life insurance policy may be your best option in your 70s, especially if you have prior health problems.
Get an incentive to meet your existing health and fitness goals with a discounted premium.
Learn your policy options based on the type of transplant and your health status now.
No-cost options are available, but these policies may not offer the coverage you need.
Save money by targeting your coverage to your largest debts.
Get the financial help you need as you search for a new job.
Learn the common health reasons that lead to rejection, and how to get life insurance anyway.
VA life insurance might be a good fit for veterans with health problems, or heavy tobacco users — but healthy veterans may be better off looking elsewhere.
Having anxiety might result in higher life insurance rates, but you can get coverage with most companies.
A policy this large may be less expensive than you think, but requires a medical exam.
I am thinking of buying permanent life insurance combined with long term care
are the premiums paid tax deductible
Hi Mitch,
Thanks for getting in touch with finder. I hope all is well with you. :)
The answer to your question is most likely no. As an individual paying life insurance premiums, your expense is considered to be a personal expense and therefore considered as not tax-deductible.
You may want to speak to a licensed accountant to learn more.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua