Life insurance and estate planning: how the indemnity is taxed and what happens with the inheritance
Occasional gain, the 3,250 UVT exemption, beneficiary designation and limits, explained with rigor and backed by ex-DIAN attorneys and CPAs.

It depends on the UVT of the year in which the indemnity is received. Only as an example for 2026, with a UVT of COP $52,374, 3,250 UVT equal COP $170,215,500. Do not use that figure for other years: DIAN sets a different UVT each year. In addition, how the cap applies when there are several beneficiaries or several policies is a question to analyze against current doctrine before assuming the cap applies to each one. If the indemnity exceeds the cap, only the excess is taxed.

Article 303-1 refers to the occasional-gain rate, and Law 2277 of 2022 set a single rate of 15%: Article 313 of the Tax Code for domestic and foreign companies and entities, Article 314 for resident individuals and estates of resident decedents, and Article 316 for non-residents on the terms of that article. There is no special rate only for life insurance. It is therefore advisable first to determine whether the recipient is a tax resident, a company or a non-resident.

It should not be answered with an absolute rule. Under Article 1148 of the Commercial Code, the gratuitous beneficiary has no right of his own over the policy during the insured's life, and the onerous beneficiary has one but cannot exercise it without the insured's written consent. Upon the insured's death the beneficiary's right is born or consolidated, as the case may be. The right therefore arises in the beneficiary's own hands and is not automatically the same as a hereditary assignment. Even so, the link with the succession reappears if there is no beneficiary or the designation is ineffective (Art. 1142), or if the case involves creditors or hereditary reserves.

Under Article 1142 of the Commercial Code, if no beneficiary was named, or the designation becomes ineffective or lapses, one half of the indemnity goes to the insured's spouse and the other half to the insured's heirs. The same rule applies when the heirs are designated generically. This is a practical reason to review the designation periodically, especially after a marriage, a separation, the birth of children or the death of a beneficiary, and to coordinate it with the will and with the rest of the plan.

Article 1141 of the Commercial Code distinguishes gratuitous from onerous designation and, absent a stipulation, presumes it gratuitous. Under Article 1148, the onerous beneficiary has a right of his own during the insured's life, which he cannot exercise without the insured's written consent. In insurance on a debtor's life, Article 1144 provides that the creditor receives only the part of the indemnity equal to the unpaid debt, and the balance goes to the other beneficiaries. It is advisable to review how the policy was drafted and what debt it backs.

Not to defraud. Neither the designation of beneficiaries nor the exemption in Article 303-1 of the Tax Code authorizes using the policy to defraud creditors or evade hereditary reserves. Whether a particular designation can be challenged by a creditor or by an heir entitled to reserves is a case-by-case analysis that depends on dates, assets, intent and evidence. At Ligal we review the policy together with the succession and tax map, without promising that a policy is untouchable or unseizable.

It should not be read that way. Article 1154 deals with the preference of the beneficiary's credits against the insurer in life insurance, ranked after those of the tax authority, and excludes surrender values from the estate in that context of competing creditors. It is a norm with a specific context, not a general rule that the indemnity can never form part of a succession or that no policy can be challenged. Before deciding, review the case with an attorney.

No. They are different mechanisms with separate rules. The life insurance indemnity has its own exemption in Article 303-1, different from the rules on inheritance and gifts. For that reason we do not compare inheritance or gift thresholds here: they are covered on our pages on lifetime gifts, succession with assets abroad and tax-driven estate planning. In practice, the policy is usually a complementary piece within a plan that may also include a will, a family company or a trust.

The analysis changes. The Tax Code rates distinguish between companies, resident individuals and non-residents (Articles 313, 314 and 316), so the beneficiary's tax residence is decisive, and the location of the policy, the governing law and the succession rules of the country of residence may come into play. We do not take the treatment of a policy issued abroad for granted: we review it case by case, and for cross-border succession we coordinate it with our page on succession with assets abroad.