Paid Life Insurance

person's Life Insurance at the time of disbursement.?

So if I die and my husband picks up the $, is that $ passive?

Only if the policy is a modified endowment contract. If not, then there is no income tax will be charged in the death claim. However, if your spouse dies before you and then you die, the death claim will be paid to his estate. Then property taxes shall apply to any family member that allegations of money.