Life insurance question

somemom
Thu, 06 Oct 2011 15:04:16 +0000

The above posters are correct. Life insurance proceeds paid as a lump sum generally do not cause a 1099 to be issued and are not income taxable.

There is no need to play games with the money if all she is receiving is loans, in that case, if it were my DD I would say skip the loans and use the insurance money for the education.

If grants are involved, you might review other options, but how much coverage are you talking about? $10k? $50k? $100K? $500k? That really makes a difference