How can you minimize taxes on life insurance payouts?

All types of life insurance are profitable for the insurance company, so, ideally, most people would purchase only the amount of life insurance they need at any stage of life and purchase the cheapest type of life insurance, which is term life insurance. 

If your estate will be above $12.06 million for individuals or $24.12 million for a married couple (in 2022), it will likely be subject to estate tax, so consulting a tax professional might be helpful to determine if your heirs would benefit from your use of a permanent life insurance contract.