Tax Implications for LLC-Paid Life Insurance

Shawn Plummer

CEO, The Annuity Expert

Key Considerations

  1. Ownership of the Policy: If the LLC is the policy owner, premiums paid are not considered a personal expense but a business expense.
  2. Taxable Death Benefit: The death benefit may be subject to taxes if the LLC pays the premiums, differing from individually-owned policies.
  3. Deductibility of Premiums: Premiums may not be deductible as a business expense, depending on the policy’s structure and purpose.

Potential Scenarios

  • LLC as Beneficiary: If the LLC is also the beneficiary, the death benefit is typically considered taxable income.
  • Employee Benefit: Certain conditions must be met for tax efficiency if used as an employee benefit.

Consultation with Professionals

  • Tax Advisor: Essential for understanding the specific tax implications for your situation.
  • Insurance Specialist: Can provide insights on structuring the policy to align with your business needs.


While your LLC can pay for your life insurance, the arrangement can lead to taxable death benefits, unlike personal policies. It’s crucial to consult with a tax professional and an insurance specialist to navigate these complexities effectively. Contact us today for a free quote.

Request A Quote

Get help or a quote from a licensed financial professional. This service is free of charge.

Contact Us

Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

Scroll to Top