Proceeds of a Life Insurance Policy Paid to a Corporation

February 5, 1960 BIR RULING NO. 038-60 Star Life Insurance Corporation 6th & 7th Floors, A & T Bldg. Escolta, Manila Gentlemen : Reference is made to your letter dated January 30, 1960, requesting a ruling from this Office as to whether or not the proceeds of a life insurance policy paid to a corporation are excludible from gross income. In reply thereto, I have the honor to inform you that the proceeds of insurance paid by reason of the death of the insured, to a corporation as beneficiary of a life insurance policy taken by it on the life of an executive do not constitute taxable income to the corporation pursuant to section 29(b)(1) of the Tax Code, in relation to section 62 of Revenue Regulations No. 2. Moreover, amount received (other than amounts paid by reason of the death of the insured and interest payments on such amounts) under a life insurance, endowment, or annuity contract excluded from gross income, but if such amounts (when added to amounts received before the taxable year under such contract) exceed the aggregate premiums or consideration paid (whether or not paid during the taxable year) than the excess shall be included in gross income. (Sec. 62, Rev. Regs. No. 2) In this connection, please be further informed that premiums paid by the corporation on the abovementioned life insurance policy covering the life of an executive cannot be allowed as a deduction from its gross income, it appearing that the aforesaid corporation is a beneficiary under such policy. (Sec. 31(a)(4), Tax Code) Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue