(1) If it appears, either from the will of the decedent or from extrinsic evidence, that an obligation of a contractual nature exists in favor of any person payable at or after death of the decedent, the sum so payable shall be treated for the purposes of this chapter as a taxable transfer, unless it affirmatively appears by competent evidence that a consideration substantially equivalent in value to t he amount due under the contract was paid or furnished by or for the other party thereto during the life of the decedent. (2) The proceeds payable under any life insurance policy on the death of the assured (other than a United States government life insur ance policy or national service life insurance policy issued by or through the federal government), payable to the assured or his estate, shall be taxable as a part of the legacy as a distributable share of the beneficiary. The proceeds of an insurance pol icy payable to a designated beneficiary, including a testamentary or inter vivos trustee, other than the assured or his estate, shall be tax -free. The proceeds payable under any United States government life insurance policy or national service life insura nce policy issued by or through the federal government, whether payable to a designated beneficiary or to the assured or his estate, and any pension or annuity payments made or to be made to the surviving spouse of an employee of a railroad or other carrie r under the Federal Railroad Retirement Act of 1935 as amended, shall be tax -free, and shall not be considered in determining the value of any taxable transfer.
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