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Our condolences for the passing of your loved one! Generally speaking, any insurance proceeds you receive after the death of the insured person are not tax deductible. The exception to this would be if the policy was given to you at a price. Even if the proceeds were paid under an accident, health insurance policy, or an endowment contract, the same holds true. Keep in mind that interest income received as a result of life insurance proceeds are likely to be taxable. For more information, you may want to read up on information regarding Life Insurance Proceeds under Miscellaneous Income in Publication 525, Taxable and Nontaxable Income provided by the IRS.
