§2042 Proceeds of Life Insurance

Summary

Put life insurance proceeds into the decedent’s gross estate when the person handling the estate (the executor) can collect them. Also include proceeds that other beneficiaries can get if the decedent had any ownership rights in the policy when they died, whether alone or with someone else. "Incident of ownership" — any ownership power or right over the policy. "Reversionary interest" — a chance the policy or its money could return to the decedent or their estate. A reversionary interest counts only if it was worth more than 5% of the policy right before death. Value such interests using normal actuarial methods and Treasury rules, and value them as if the decedent had not yet died.