Genny Lemos

Death benefits are generally tax free, but interest earned on delayed payouts is taxable and can raise income for Part B and Part D premiums.
If a widow's usual MAGI is ~$105K, adding $10K of taxable interest can push her above the $109K single filer line for standard Part B.
At ~$115K MAGI, a single filer sees Part B add $81.20 monthly and Part D add $14.50, creating ~$1.1K yearly in extra premiums.
A spouse's death can support an appeal if household income fell, letting the agency review a newer lower income figure instead of an older return.
Before leaving proceeds with an insurer, check interest timing, estimate income near surcharge thresholds, and see whether taking funds sooner could limit taxable earnings.

Tax-Free Proceeds Can Still Create Taxable Income

The best time to secure life insurance is before health, age, or crisis changes options, because delays can raise costs or limit availability.
For young families, coverage can help protect the home, education goals, childcare, and daily bills when one income disappears after a loss.
A 2026 survey showed business protection stayed owners' top priority, yet many still overlooked the financial and operational risk tied to owners and key employees.
Cost often is not the main hurdle; waiting is, and a sudden loss can strain revenue, staffing, family decisions, and succession planning.
The current awareness month serves as a practical reminder: review coverage before major life or business changes, so protection is ready if plans shift.