Swiss Life Insurance Payout with USA IRS Tax obligations

Finance, Taxes, Banking, Insurance and Retirement
1
Does anyone have any knowledge if a Swiss Life Insurance policy payout is taxable income in the USA. The person insured is a US Citizen, files US Taxes every year and the partner to receive the death benefit is also a UC Citizen and files US Taxes every year.

I know a US Life Insurance policy is not taxable in the US but what if you take out a Swiss life insurance policy - is that payout now considered income in the event of death?

I have also seen this Swiss Life Insurance Policy classified as "Flexible Pension, Pilar 3B" with a set amount of years 25/30/40 and a set annual premium to pay...

2
Why don't you just flat out ask them? If they really take the extra care to comply with US regulations, as doubtful as it may be, they would probably gladly tell you so.

But in general for a non-compliant life insurance policy I would assume yes, the whole payout minus US tax basis (sum of premiums paid basically and it better be with after tax money) is going to be taxed as income. You might be also subject to interim taxes and extra reporting due to PFIC rules while holding it... It's probably going to be best to surrender/sell the swiss policy if you already bought it and buy a proper US policy instead.

Not a US tax advisor/lawyer etc. seek your own professional advice if you need one