No, life insurance proceeds that you receive as a beneficiary due to the death of the insured person, are not taxable. If you receive any reported interest on the proceeds, then that is taxable.

I know inheritance from life insurance is not reported at the Federal level but is it also not reported as income on my Michigan State return? Turbo Tax Michigan State section in the "Sources of Household Resources" asks "received inheritance or proceeds from a life insurance policy as beneficiary." 

Many thanks for the clarification.  Don't understand why Turbo Tax Michigan State return asks the question.