Life insurance benefit is paid out as a tax-free lump sum. Joint and Dual life policies are paid directly to the second life assured and are always tax-free, as they don’t form part of your estate. Typically, unless you leave a very large estate on your death, your spouse will not have to pay tax on the life insurance pay-out.
However, anyone who inherits the money after your death, depending on their relationship to you, may have to pay inheritance tax. How much tax they pay depends on how much they inherit and Revenue rules at the time of your death. If you have a large estate, you can buy a specific type of life insurance policy, to provide a tax-free lump sum to cover any inheritance tax liabilities that your beneficiaries may have when you die.