Tax Facts

187 / Is a life insurance policy loan deductible as a claim against the estate?

Updated: October 02, 2024 at 01:55 PM
No. A policy loan is considered an advancement of part of the policy proceeds, not an enforceable claim against the estate.1 Only the excess of the proceeds over the amount of the policy loan is includable in the gross estate.





1.     Treas. Reg. §§ 20.2042-1(a)(3), 20.2053-4; Kennedy v. Commissioner, 4 BTA 330 (1926).

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