632 / Is the value of a death benefit payable under a nonqualified employee annuity includable in an employee’s gross estate?

If an employee was receiving payments under the contract when he or she died, or if the employee would have had the right to receive payments had he or she lived, the value of the death benefit is includable in the employee’s gross estate.¹ It is immaterial whether the employee’s rights were forfeitable or nonforfeitable before death.² Premiums paid by the employer are considered as having been paid by the employee himself.³ For tax sheltered annuities purchased for employees of tax-exempt organizations and public schools, see Q 633.