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Purchasing life insurance in Pennsylvania is an important matter and as such, it deserves significant thought and consideration. Several factors may affect your decision regarding the type and amount of life insurance that you choose to purchase. Regulations regarding life insurance vary from one state to the next. Be sure to consider the following facts, when considering the purchase of Pennsylvania life insurance.

Insolvency coverage is limited to $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance; in the event that your insurance provider is unable to fulfill your policy.

In terms of debt collection, life insurance proceeds are exempt, if there is a clause that prohibits the proceeds from being used to pay the beneficiary's creditors.

In Pennsylvania, transfers of property to or for the use of a decedent's surviving spouse are completely exempt from Pennsylvania inheritance tax. After a $3,500 family exemption, transfers to the following beneficiaries are taxed at the rate of 4.5 percent: grandparents; parents (except that transfers from a child 21 years of age or younger are tax-exempt); lineal descendants (includes biological children, adopted children, and step-children, as well as their descendants); and the wife or widow and husband or widower of a child. Transfers to siblings, related to the decedent by blood or adoption, are taxed at the rate of 12 percent. A transfer to anyone not listed above is taxed at a rate of 15 percent. However, transfers for public, government, charitable, and religious use are exempt from inheritance tax.

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