In most instances, a person who receives the proceeds of a life insurance policy does not have to pay federal or state income tax on those proceeds. In Kansas and Missouri, the person who receives the death benefit (the beneficiary) does not have to declare the proceeds as taxable income.
There are exceptions to this rule, for example, if the life insurance policy is structured as a series of payments (e.g. an annuity) special rules may apply where the beneficiary will have to pay taxes on the life insurance proceeds. Taxes may also be required if pre-tax contributions have been made to a life insurance policy. Life insurance policies are contract claims and are generally not governed by wills. If you are dealing with the death of a loved one, life insurance proceeds are often kept separate from a general estate.
The Kansas Insurance Department has published a guidebook for Life Insurance and Annuity Basics.