Life insurance premiums are generally not deductible on your tax return. This is because the IRS considers it a personal expense. However, there are few exceptions, such as life insurance premiums paid by a business for its employees may be deductible as a business expense of the business, provided the business is not a beneficiary of the life insurance policy or benefits from the policy in any way and certain other conditions are met. A beneficiary is the individual or entity who receives the death benefit money in the event of death. On a positive note, generally the death benefit money received by a beneficiary due to the death of an individual is tax-free.