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There could be an inheritance tax if it is not in a life policy. Depends on the state.
I don't believe that is true, but would like to learn if it is.
what state counts all your assets & investments, but ignores you life insurance owned by you? Most calculations for federal or state estate taxes count every asset from cash, securities, land, retirement, personal belongings & the death benefit of term/permanent plans in the valuation of your estate.
Also, the OP was talking income taxes because he was stating the beneficiaries are in higher tax brackets. Estate taxes are not impacted by the beneficiaries income tax brackets as estate taxes are paid by the decedent, not the beneficiary of the accounts