<prompt> Human: hey yall, its like the title says. I just got a life insurance policy thru my employer, set to payout to my younger sister. Initially I thought I was doing her a favorthinking of her and the like, but Ive recently heard stories of loved ones having to pay heavy taxes on the payouts before theyre even able to touch the money left to them. Couple that with the income change noted by the IRS, Im kinda scared my altruistic gesture is in actuality, a real fuck up. I havent informed her of my decision yet, and I probably shouldve asked her first. Is there any way I can change it if I shit the bed?  <response>: Life insurance proceeds arent taxable income although as that link from the IRS states some interest income may be taxable. 