Effective Federal Income Tax Rate

Published: | Updated: January 10, 2018

Definition - What does Effective Federal Income Tax Rate mean?

The effective federal income tax rate is the rate at which individuals and businesses have their incomes taxed by the federal government. Similarly, disability income benefits are sometimes subject to being taxed and sometimes not. Whether they are taxed can depend on whether the premiums for the policy are paid by its beneficiary or not.

Insuranceopedia explains Effective Federal Income Tax Rate

Most of the time, death benefits from life insurance policies are not taxable. However, if a person receives a death benefit over a period of time as opposed to receiving it in a lump sum, and if the benefits generate interest over that time, then the interest can be subject to the effective federal income tax rate.

How Well Do You Know Your Life Insurance?

The more you know about life insurance, the better prepared you are to find the best coverage for you.

Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.

Share this:

Connect with us

Email Newsletter

Join thousands receiving the latest content and insights on the insurance industry.