Tax Facts

423 / Is an accidental death benefit payable under a health insurance policy includable in an insured’s gross estate?

Accidental death benefits are life insurance proceeds subject to the same rules as proceeds under regular life insurance policies ( Q 81).1


When an insured purchased a one year accidental death policy and arranged for the policy to be owned by the insured’s children from the beginning, the proceeds were includable in the insured’s estate as a transfer in contemplation of death when the insured died within the policy term.2





1.     Commissioner v. Estate of Noel, 380 U.S. 678 (1965); Estate of Ackerman v. Commissioner, 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. denied, 406 U.S. 919 (1972).


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