From the perspective of China law, it is legal to avoid inheritance tax by buying insurance. According to the third paragraph of Article 23 of the Insurance Law: "No unit or individual may illegally interfere with the insurer's obligation to pay compensation or insurance benefits, and may not restrict the right of the insured or beneficiary to obtain insurance benefits."

Insurance tax avoidance is mainly to avoid inheritance tax, and the country will definitely levy inheritance tax in the near future. Individuals will buy high-value life insurance policies, and the beneficiaries will be their own children; Or you can insure your child with financial insurance, so you don't have to pay inheritance tax if your child gets it through insurance in the future.

In addition, life insurance is also an important tax avoidance method. After taking out life insurance, the funds are separated from personal assets and transferred to insurance companies. After the death of the insured, the insurance compensation is not included in the total taxable estate. And life insurance also has the ability to realize cash. The insured usually pays cash immediately after death, and this insurance money will not be frozen, so it can be used as a source of funds for paying inheritance tax. There are two ways to avoid tax in life insurance, one is to transfer assets before death, and the other is to get compensation after death.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.