Updated October 18, 2026. Quick answer: Schedule D lists every life insurance policy on the decedent’s life, whether or not the proceeds end up in the gross estate. Proceeds payable to the estate are included, and so are proceeds payable to others if the decedent held incidents of ownership. Each policy needs a Form 712 statement from the insurer.
What goes on Schedule D
“If you are required to file Form 706 and there was any insurance on the decedent’s life, whether or not included in the gross estate, you must complete Schedule D (Form 706) and file it with the return.” The listing rule is “You must list every insurance policy on the life of the decedent, whether or not it is included in the gross estate.” Under the description column, “The name of the insurance company, and” “The number of the policy.”
Every schedule opens with the same caution. “If any assets to which the special rule of Regulations section 20.2010-2(a)(7)(ii) applies are reported on this schedule, do not enter any value in the last three columns.” It then points the reader to the instructions for Part V, item 10, which explain how to estimate and report the value of those assets.
What the gross estate includes
The instructions say “Under section 2042, you must include in the gross estate” two kinds of insurance: “Insurance on the decedent’s life receivable by or for the benefit of the estate” and “Insurance on the decedent’s life receivable by beneficiaries other than the estate”. Of the first kind, “You must include the full amount even though the premiums or other consideration may have been paid by a person other than the decedent.”
The instructions define the term to cover “life insurance of every description, including death benefits paid by fraternal beneficiary societies operating under the lodge system”.
Insurance paid to someone other than the estate
For proceeds paid to a beneficiary, the test is ownership. The instructions say to include the proceeds “if the decedent possessed at death any of the following incidents of ownership, exercisable either alone or in conjunction with any person or entity.” The listed incidents include “The right of the insured or estate to its economic benefits.” “The power to change the beneficiary.” “The power to assign the policy or to revoke an assignment.” “The power to pledge the policy for a loan.” and “A reversionary interest if the value of the reversionary interest was more than 5% of the value of the policy immediately before the decedent died.”
Insurance can also land in the estate under other rules: “Life insurance not includible in the gross estate under section 2042 may be includible under some other section of the Code.” The Schedule G page covers those sections. Planning questions about ownership of policies are outside the form; the estate planning page is the place to start.
Where the number comes from
The insurer supplies the figures. The instructions say “request a statement on Form 712 from the company that issued the policy. Attach the Form 712 to Schedule D (Form 706).”
If the insurer will not provide one: “you should attach evidence that verifies the amount includible on Schedule D (Form 706)”. On the amount, “If the policy proceeds are paid in one sum, enter the net proceeds received from Form 712, line 24”. When proceeds are not paid in one sum, “enter the value of the proceeds as of the date of the decedent’s death from Form 712, line 25.” If the policy was excluded, “If part or all of the policy proceeds are not included in the gross estate, explain why they were not included.”
Where it goes next
Each schedule feeds one item of Part V, the recapitulation, on the form. The form’s caption for this schedule reads “Total insurance on the decedent’s life. Schedule D, line 4. Attach Form(s) 712”. The Part V instructions list which schedules to attach: “Schedule D (Form 706), if the gross estate includes any life insurance or if you answered” The same instructions say “If the gross estate does not contain any assets of the type specified by a given item, enter zero for that item.” They add “Entering zero for any of items 1 through 9 is a statement by the executor, made under penalties of perjury, that the gross estate does not contain any includible assets covered by that item.”
For the alternate value column, the Part V instructions say not to enter amounts there “unless you elected alternate valuation on Part III, line 1.” That election is explained on the Part III elections page and the alternate valuation date page, and the recapitulation is covered on the Parts 4 and 5 page. The return itself is explained on the Form 706 page.
Edition and line numbers
This page reads the Form 706 revision dated August 2025 and the Instructions for Form 706 revision dated July 2026. They are the current files irs.gov served on 2026-10-18, byte-identical to the archived copies used here. The instructions state “For decedents dying after December 31, 2025.” The form itself says “To be filed for decedents dying after December 31, 2024.” Check the revision date printed on your Form 706 and the instruction edition for the year of death, and use the line numbers on that revision.
Common mistakes
- Leaving off a policy because the proceeds are not taxable to the estate. The instructions say to list every policy “whether or not it is included in the gross estate.”
- Skipping the insurer’s statement. The instructions say “request a statement on Form 712 from the company that issued the policy.”
- Overlooking ownership rights held by the decedent. Proceeds count if the decedent held “incidents of ownership”, which include “The power to change the beneficiary.”
Related: Form 706, estate planning, and estate planning glossary.
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- Instructions for Form 706 (Rev. July 2026): https://www.irs.gov/pub/irs-pdf/i706.pdf
- Form 706 (Rev. August 2025), United States Estate (and Generation-Skipping Transfer) Tax Return: https://www.irs.gov/pub/irs-pdf/f706.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.