Is My Life Insurance Policy Part Of My Estate? 
Yes , the death benefit that your beneficiary would receive is considered part of the value of your estate . If you passed away leaving a surviving spouse , your spouse would not have to pay any federal estate tax , regardless of the size of your estate . If no spouse is surviving at the time of death , there is a 5.25 million dollar exemption , plus any exemptions remaining from when the first spouse died . Only the amount beyond that exemption is taxed . State estate taxes have their own exemptions and regulations , depending on the state . 