646. Is an accidental death benefit payable under a health insurance policy includable in the insured's gross estate?
Such benefits are "life insurance" proceeds, and are subject to the same rules as proceeds under regular life insurance policies (see Q 626). (1) When insured purchased a one year accidental death policy and arranged for the policy to be owned by his children from the beginning, the proceeds were includable in his estate as a transfer in contemplation of death when he died within the policy term. (2)
647. Are medical expense reimbursement insurance proceeds received by the insured decedent's estate includable in the gross estate?
IRS has ruled that such payments are includable under IRC Section 2033 (see Q 852(1)) if the insured had an enforceable right to the proceeds at his death. (3)
(1.) Comm. v. Est. of Noel, 380 U.S. 678 (1965); Est. of Ackerman v. Comm., 15 BTA 635 (1929); see Rev. Rul. 66-262, 1966-2 CB 105.
(2.) Rev. Rul. 71-497, 1971-2 CB 329; Bel v. U.S., 452 F.2d 683 (5th Cir. 1971), cert. den. 406 U.S. 919.
(3.) Rev. Rul. 78-292, 1978-2 CB 233.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||PART II: FEDERAL ESTATE TAX ON INSURANCE AND EMPLOYEE BENEFITS|
|Publication:||Tax Facts on Insurance and Employee Benefits|
|Date:||Jan 1, 2010|
|Previous Article:||Group life insurance.|
|Next Article:||Individual retirement plans.|