All proceeds of a life or accident insurance policy which are payable on the death of the insured to his estate, executor, or administrator, or which in fact are receivable by or for the benefit of the insured's estate are subject to the Inheritance Tax Law, except proceeds of any federal war risk insurance of any veteran of World War I or World War II (see Revenue and Taxation Code Section 13861) and except for proceeds of any National Service Life Insurance or Servicemen's Group Life Insurance Policy of any veteran of the Vietnam Conflict exempt under the provisions of Revenue and Taxation Code Section 13861.5.

All proceeds of any policy similar to the type mentioned in the preceding paragraph which are payable to a testamentary trustee or to a trustee who is under a legal obligation to use the funds to meet taxes, charges, debts, or expenses legally enforceable against the insured's estate are subject to the Inheritance Tax Law. So also are proceeds of similar insurance taken out by an insured in favor of a named person or corporation as collateral security for a loan or other accommodation, the proceeds in such case being considered as receivable for the benefit of the insured's estate.

Note: As to the valuation of insurance, see Section 13951.9.

As to taxation of annuity contracts, see Sections 13644.1, 13648 and 13648.1.

As to withholding and notice requirements prior to delivery of insurance proceeds by insurance companies and issuance of consents to delivery such proceeds, see Sections 14345 and 14345.1.

Note: Reference: Section 13722, Revenue and Taxation Code.