Received life insurance proceeds after beneficiary died

[erodnuny1]

My husband’s mother was the beneficiary to her second husband’s policy.  She passed away before her husband.  He then passed and his life insurance proceeds were distributed to his late wife’s children including my husband.  Second husband was not children’s father. Do we report the life insurance proceeds as income?

[rjs · Accepted solution]

No, an ordinary death benefit from a life insurance policy is not taxable income, and you do not report it on your tax return. It doesn't matter whether the beneficiary is related to the deceased.

[Anonymous]

note that on some delayed payments, the insurance company may pay interest.  it will issue a 1099-int and the interest is taxable.